Derivative strategy on Larsen & Toubro by Chandan Taparia

Derivative strategy on Larsen & Toubro by Chandan Taparia of Motilal Oswal Securities: 

OPTION STRATEGY:

Larsen & Toubro  Call Ladder Spread

Buy 1540 CE 1 lot

Sell 1560 CE 1 lot

Sell 1580 CE 1 lot

Target Profit: Rs 10,000  

Maximum Loss: RS 1,000 below 1,540

Hedge Above: Buy Future above 1595

Rationale:

1. Larsen & Toubro has been consolidating in last few trading session

2. Highest put congestion at 1520 could provide support to the stock. while highest call congestion is placed at 1560

3. As we are participating bullish momentum and to benefit from theta decay, Bull Call Ladder is recommended

Disclaimer: Motilal Oswal Securities ( MOSL ) is regulated