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Derivative strategy on Tata Steel by Motilal Oswal

Chandan Taparia/Mumbai 17 Mar 17 | 08:36 AM

Derivative strategy on Tata Steel by Chandan Taparia of Motilal Oswal Securities:


Option Strategy:

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TATA STEEL


Bull Call ladder Spread


Buy 510 CE 1 lot

Sell 520 CE 1 lot

Sell 530 CE 1 lot


Target: 18,000                             

Stoploss: 1600  

Hedge: Buy future above Rs 535


Rationale:


1.Tatasteel is in long-long unwinding cycle

2. Unwinding in 500 CE and incremental addition in 490 & 500 PE suggest upward shift in band

3. Immediate highest call congestion is placed at 520

4. In order to benefit from faster time decay, Bull Call Ladder is recommended


Disclaimer: Motilal Oswal Securities ( MOSL ) is regulated by the Securities and Exchange Board of India ("SEBI") and is licensed to carry on the business of broking, depository services and related activities. MOSL is in the process of getting registered under SEBI - Research Analyst Regulations. MOSL, the spokesperson or his relatives, do not have financial interest in the securities mentioned above. The spokesperson has not served as a director, employee or officer at the subject company in the last 12 months. MOSL or its associate might be involved in market making for the subject company or have potential conflict of interest.


Chandan Taparia is a Deivatives and Technical Analyst at Motilal Oswal Securities.

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