 "stock prices, Nifty Smallcap, stock market, initial public offering, IPO")
Derivative Strategy
BULL SPREAD Strategy on BANK NIFTY
- Buy BANKNIFTY (31-July Expiry) 57,500 CALL at ₹497 and simultaneously sell 58,000 CALL at ₹319
- Lot Size: 35
- Cost of the strategy ₹178 (₹6,230 per strategy)
- Maximum profit ₹11,270 If BANK NIFTY closes at or above 58,000 on 31 July expiry.
- Breakeven Point ₹57,678
- Risk Reward Ratio 1:1.81
- Approx margin required ₹40,000
Rationale:
- Primary trend of the Bank Nifty remains positive as it is placed above its 50 and 100 day EMA
- Short term trend of the Index is positive as it is placed above its 20 day EMA
- It has been forming bullish higher top higher bottom formation on the weekly chart.
- Put writing is seen at 56,500-57,000 levels.
- FIIS long to short ratio in the Index Futures stands near oversold level, suggesting higher possibility of a short covering by them in the coming days.
BULL SPREAD Strategy on PFC
- Buy PFC (31-July Expiry) 430 CALL at ₹12 and simultaneously sell 450
- CALL at ₹4.80
- Lot Size 1,300
- Cost of strategy ₹7.2 (₹9,360 per strategy)
- Maximum profit ₹16,640 If PFC closes at or above ₹450 on 31 July expiry.
- Breakeven Point ₹437.2
- Risk Reward Ratio 1:1.78
- Approx margin required ₹19,500
Rationale:
- Long build up is seen in the PFC Futures, where we have seen 6 per cent rise in open interest with price rising by 2.80 per cent.
- Short term trend remains positive, as the stock price is placed above its 5, 11 and 20 day EMA.
- Primary trend turned positive as stock price closed above its 200 day EMA.
- Oscillators like RSI and MFI are in rising mode and placed above 60 on the daily chart, indicating strength in the current uptrend.
 "National stock exchange, NSE")
 "Stock market")
 "BSE")
 "Stock market")
 "GLEN Industries IPO allotment")
