Derivative strategy on Nifty Bank by Motilal Oswal Securities

Derivative strategy on Nifty Bank by Sacchitanand Uttekar, Equity Technical Analyst & PFA at MOSL:
 
Strategy:  Nifty Bank (Ratio Call Spread)
 
Buy 20500 CE 23FEB’17 1 lot
Sell 21000 CE 23FEB’17 2 lots
 
Rationale:
 
Nifty Bank is in long-long Unwinding Cycle
 
Option data shows highest put concentration at 19,500/19,000 indicating support zone
 
Any unwinding in 20,000 CE could lead to option trigger thereby fuelling the momentum towards 20,500-21,000
 
Considering falling volatility, Ratio Call Spread is recommended
 
Target: Rs 15,000 around 20,800
 
Initial Outflow: Rs 3,000
 
Hedge : Above 21,350