The following are Derivative calls for September Series or different time frame as indicated against each strategy given by KARVY STOCK BROKING HOUSES:
The Nifty is expected to remain in a range of 4,700-4,900 levels. The 4,800 level should sustain in the near term and is extremely crucial for any recovery towards 4,900 levels. However, in our view, in the current scenario, the Index may continue to face stiff resistance around 4,850 levels and may remain weak in the short term. A breach of the 4,700 level will intensify the selling pressure.
NIFTY:
Sell Nifty September futures @ 4,780-4800* average: 4,880* stop loss: 4,920* target: 4,700* (*spot levels)
NIFTY STRATEGY:
Bear Put Spread: Buy one September 4700-strike put option @ 150 and sell one September 4600-strike put option @ 120; Max profit: ` 3,500 if the Nifty expires at or below 4600 levels in September; Max loss: ` 1500 (cost) if the Nifty expires at or above 4700.
Symbol Recomm Entry Stop Loss Target Time Frame
Sep4900CE Short 95-100 4960(Spot) 70-72 1 Week
Sep4700PE Long 140-145 4920(Spot) 175-180 1 Week
::DIFFERENT STRATEGIES::
HYBRID STRATEGIES:
Bear-put in SBI: SBI saw fresh addition of short position during the weekend on the back of 94% rollover in August futures. On the options front, SBI August out-of-the-money call options saw writing, while at-the-money put options witnessed buying, suggesting further downside in the stock in the near term. SBI 2000-strike call and 1900-strike put saw maximum accumulation at 1.7 lakh and 0.9 lakh shares, respectively. The stock has been battered down and, technically, has breached its strong support of 1,900 levels. We expect selling pressure to continue in the stock until the next support at 1,750-1,780 levels.
Buy one SBI Sep 1900 PE @ 93-95 and sell one 1800 PE @ 55-58; BEP: 1860; max profit: ` 7,500 below 1800 levels; max loss: ` 5,000 if it remained above 1900.
Short strangle in Bharti: Bharti saw closure of shorts and rollover of long positions from the August series. On the options front, ATM call and put options saw addition of short positions, indicating range-bound movement for the stock. Technically, the stock has been moving sideways over the last couple of weeks, with immediate support at 380 levels. We expect the counter to remain in a broad range of 380-420 levels for this expiry.
Sell one Bharti Sep 380 PE @ 7.5-8.0 and sell one Aug 420 CE @ 7.5-8.0; LBEP: 365; BEP: 435; max profit: ` 15,000 if the stock remains between 380 and 420 levels.
PAIR STRATEGY:
DLF and HDIL: DLF and HDIL have shown correlated movement in the past, with rolling price correlation of 94% in the one year dataset. DLF had outperformed HDIL in the recent past. The current price ratio of DLF and HDIL is 1.84. The ratio is currently trading around its high and appears stretched; we believe that it is likely to revert to its mean levels. The mean price ratio is 1.45 and the current price ratio is more than 94 percentile away from the mean ratio. There is a high probability of convergence between the stocks from current levels.
Buy HDIL one lot Sep futures @ 94-95 and sell one lot of DLF Sep futures @ 176-178; current price ratio: 1.84; target: 1.55 and 1.45; SL: 1.95.
NOTE: ALL ARE REQUESTED TO TRADE ON THEIR OWN DECISION/RISK AND WITH STRICT STOPLOSS. Please understand that by following stop losses, you can restrict your losses if the market goes against you. Please ensure that if you are taking any position in the F&O market, you strictly abide by the recommended stop loss. It is not advisable to get involved in complex F&O strategies if you have just started to trade in derivatives. Start with simple trades like buying and selling the Nifty and buying and selling stock futures of the 10 most liquid stocks in the F&O segment. Once you are comfortable with these basic futures transactions, you can gradually move on to buying call and put options. However, remember that writing of call and put options should only be taken up by informed investors.
