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Derivative Strategy
Buy PERSISTENT (31-Aug Expiry) 5100 CALL at Rs 104 & simultaneously sell 5300 CALL at Rs 33
Buy PERSISTENT (31-Aug Expiry) 5100 CALL at Rs 104 & simultaneously sell 5300 CALL at Rs 33
Lot Size 175
Cost of the strategy Rs 71 (Rs 12,425 per strategy)
Maximum profit Rs 22,575; If PERSISTENT closes at or above Rs 5300 on 31 August expiry.
Breakeven Point Rs 5,171
Risk Reward Ratio 1:1.82
Approx margin required Rs 31,300
Rationale:
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Long build up is seen in the Persistent Futures on Thursday where Open Interest rose by 10 per cent (Prov) with the stock rising by 2.29 per cent.
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The stock price has broken out from the downward sloping trendline, adjoining the highs of 05-June and 20-July 2023.
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The stock price has been forming bullish higher top higher bottom formation on the weekly chart.
- Momentum Oscillators like RSI and MFI are sloping upwards and placed above 60 on the daily chart, indicting strength in the stock.
Note : It is advisable to book profit in the strategy when ROI exceeds 20%.
Disclaimer: Nandish Shah is Sr. Derivatives & Technical Research Analyst at HDFC Securities. He doesn't hold any position in the stock. Views are personal.
