Derivative Strategy
BULL SPREAD STRATEGY ON BANK NIFTY
Buy BANK NIFTY (30-June Expiry) 55,500 CALL at ₹825 & simultaneously sell 56000 CALL at ₹610
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Lot Size 30 -
Maximum profit ₹8,550 If BANK NIFTY closes at or above 56,000 on 30 June expiry. -
Maximum Loss ₹6,450 If BANK NIFTY closes at or below 55,500 on 30 June expiry. -
Breakeven Point ₹5,5715 -
Risk Reward Ratio 1: 1.33 -
Approx margin required ₹33,000
Rationale:
➢ Long build up is seen in the BANK NIFTY Futures, where we have seen rise in Open
interest along with price rise.
➢ Amongst the options, put writing is seen at 55,000-54,500 levels.
➢ RSI Oscillator is in rising mode and placed above 60 on the daily chart.
Note : It is advisable to book profit in the strategy when ROI exceeds 20 per cent.
BULL SPREAD Strategy on TORRENT PHARMA
Buy (30-June Expiry) 4600 CALL at ₹98 & simultaneously sell 4700 CALL at ₹58
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Lot Size 125 -
Maximum profit ₹7500 If TORRENT PHARMA closes at or above 4700 on 30 June expiry. -
Maximum Loss ₹5000 If TORRENT PHARMA closes at or below 4600 on 30 June expiry. -
Breakeven Point ₹4640 -
Risk Reward Ratio 1: 1.5 -
Approx margin required ₹20000
Rationale
➢ Long build up is seen in the Torrent Pharma Futures where we have seen rise in OI with
price rising by 3 per cent.
➢ Stock price is forming bullish higher top higher bottom formation on the weekly and
monthly charts.
➢ RSI Oscillator is in rising mode and placed above 60 on the daily chart, suggesting
strength in current uptrend.
Note : It is advisable to book profit in the strategy when ROI exceeds 20 per cent.
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(This article is by Nandish Shah, senior technical/derivative analyst at HDFC Securities. Views expressed are his own.)
