The following are weekly Derivative calls for November Series or different time frame as indicated against each strategy given by KARVY STOCK BROKING HOUSES:
Owing to mixed and, therefore, cautious global cues hereafter, the market is expected to remain in the range of 5,200-5,400 levels in the short term. If the Index sustains the 5,200 mark on a closing basis, it could gradually inch up towards 5,400 on the back of short covering and fresh buying. Alternatively, a failure to sustain the 5,200 mark will induce profit-taking, thus dragging the Nifty down to lower supports of 5,100 levels.
NIFTY:
Buy Nifty November futures @ 5,250-5260* Average: 5,200 stop loss: 5,170* target: 5,330, 5,350* (*spot levels)
NIFTY STRATEGY:
Call Ladder: Buy 1 lot of 5300 CE @ 105-110, sell 1 lot of 5400 CE @ 60-65 and sell 1 lot of 5500 CE @ 30-35. UBEP: 5585 LBEP: 5315. Max Loss: ` 750 below 5300; Max Profit: ` 4,250 if market expires between 5400-5500.
Symbol Recomm Entry Stop Loss Target Time Frame
Nov5200PE Short 50-55 5200(Spot) 20-25 1 Week
Nov5300CE Long 95-100 5170(Spot) 125-130 1 Week
::DIFFERENT STRATEGIES::
HYBRID STRATEGY:
Reverse Collar in TCS: TCS saw closure of long position since inception, with the stock shedding 3% in open interest. On the options front, the highest accumulation was seen in the 1,100-strike call and put options, implying the counter may remain range-bound with a negative bias. Technically, the stock has closed below its 200-day SMA and the momentum oscillators indicate further downside until next support at 1,050 levels in the near term.
Sell one TCS Nov futures @ 1105-1110 and sell one 1050 PE @ 10-11 and buy one 1100 CE @ 32-33; BEP: 1087; max profit: ` 9,250 if stock remains below 1050; max loss: ` 3,250 if stock remains above 1100.
Bull Call in Bharti Airtel: Bharti Airtel saw addition of long positions in the last session as the stock added 7% in open interest along with an increase in cost-of-carry. On the options front, the November ATM call options saw addition of long positions, indicating the stock is likely to trade with a positive bias. Technically, it is trading above its 50-day and 200-day SMAs, and a move above 400 levels could take it to 415-418 levels.
Buy one Bharti Nov 400 CE @ 10-11 and sell one Nov 420 CE @ 4-5; BEP: 406; max profit: ` 14,000 if stock remains above 420 levels; max loss: ` 6,000 if stock remains below 400.
PAIR STRATEGY:
Petronet and GSPL: Petronet and GSPL have shown correlated movement in the past, with rolling price correlation of 70% in the last six-month data-set. Petronet had outperformed GSPL in the recent past. The current price ratio of Petronet and GSPL is 1.68. The ratio is currently trading around the higher range and has potential to rise further; we believe that it is likely to divert further from its mean levels. The mean price ratio is 1.55 and the current price ratio is only 20 percentile away from the mean ratio. There is a high probability of divergence between the stocks from current levels.
Buy Petronet one lot Nov futures and 200 shares @ 170-173 and sell two lots of GSPL Nov futures @ 102-105; current price ratio: 1.68; target: 1.80 and 1.90; SL: 1.53.
Best buys:
Best buys:
Symbol Option Entry SL Target TF
Idea Nov 100C 1.5-2 1 4.5-5 7-8 Days
DLF Nov 250C 6.5-7 5 14-15 8-10 Days
Reliance Nov 900C 14-15 10 28-30 11-12 Days
Writing attractions:
Symbol Option Entry SL* Target TF
ICICI Bank Nov 940C 14-15 925 1-2 14-15 Days
TCS Nov1150C 15-17 1150 1-2 18-20 Days
Relinfra Nov 480C 12-13 480 3-4 15-17 Days
* Spot levels
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.
