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Derivative strategy on Tata Steel by Chandan Taparia of Motilal Oswal Securities:
Option Strategy
Tata Steel: Bull Call Spread
Buy 520 CE 1 lot
Sell 530 CE 1 lot
Rationale
1. Tata steel had seen traces of short covering in last series and a strong rollover too
2. Proximity of stock towards its highest call raises expectation of a breakout
3. Follow through movement above 500 could lead to aggressive unwinding in 500 CE propelling the momentum on higher side.
4. Thus trading strategy, OTM Bull Call Spread is recommended
Option Strategy
Tata Steel: Bull Call Spread
Buy 520 CE 1 lot
Sell 530 CE 1 lot
Rationale
1. Tata steel had seen traces of short covering in last series and a strong rollover too
2. Proximity of stock towards its highest call raises expectation of a breakout
3. Follow through movement above 500 could lead to aggressive unwinding in 500 CE propelling the momentum on higher side.
4. Thus trading strategy, OTM Bull Call Spread is recommended
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