 "share market, stock market")
Derivative Strategy
BEAR SPREAD Strategy on ICICI Lombard General Insurance
Buy ICICIGI (31-July Expiry) 1,900 PUT at ₹18.6 & simultaneously sell 1,880 PUT at ₹11.4
Lot Size: 325
Cost of the strategy: ₹7.2 (₹2,340 per strategy)
Maximum profit ₹4,160 If ICICI General Insurance closes at or below 1880 on 31 July expiry.
Breakeven Point: ₹1,892.8
Also Read
 "technicals")
 "Infosys")
 "share market, trading")
 "Markets, bulls, bears, stocks, trading, technicals, market technical, technical analysis")
 "Market rally, bull, markets, stocks, economy, growth")
Risk Reward Ratio: 1:1.78
Approx margin required: ₹22,000
Rationale:
>> We have seen a short build-up in ICICI Lombard General Insurance stock. This is indicated by an increase in Open Interest (OI) of 3 per cent, with a 2 per cent decline in the price.
>> Short term trend is weak as it is placed below its 5, 11 and 20 day EMA
>> Stock price has broken down on the daily chart with higher volumes.
>> Momentum Indicators and Oscillators are showing weakness in stock.
Note : It is advisable to book profit in the strategy when ROI exceeds 20 per cent.
(Disclaimer: This article is by Nandish Shah, senior technical/derivative analyst at HDFC Securities. Views expressed are his own.)
 "National stock exchange, NSE")
 "HDFC Bank")
 "Dr Reddy's, DRL, Dr Reddys")
 "The Executive Centre (TEC)")
 "MCX")
