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Derivative strategy on Coal India by Motilal Oswal Securities

Chandan Taparia/Mumbai 19 Sep 17 | 08:16 AM

Option strategy on Coal India by Chandan Taparia, Derivative & Technical Analyst at Motilal Oswal Securities:


Strategy:

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COAL INDIA - BULL CALL SPREAD


BUY COAL INDIA 260 CALL

SELL COALINDIA 270 CALL

BEP : 263.50


MAX RISK : 3.50 POINTS (Rs.5950)

MAX REWARD : 6.50 POINTS (Rs.11050)


Rationale:


1) It has bottomed out after the weakness of last six months

2) Managed to hold above 250 zones

3) Given the highest daily close in last eight weeks

4) Call unwinding at 260 strike suggests an up move

5) Maximum Put OI at 250 strike could support the stock

6) Thus Bull Call Spread is recommended to trade the positive to range bound move


Disclaimer: The analyst may have positions in any or all the stocks mentioned above.

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Sensex

Company Price Gain (%)
St Bk of India253.353.09
NTPC181.902.97
O N G C176.502.86
Hind. Unilever1,266.801.45
Tata Steel721.301.40

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