Derivative strategy on Tata Steel from Motilal Oswal Securities

Mentioned below is the derivative strategy on Tata Steel:

Option Strategy

Tata Steel (Call Ladder Spread)
 

Buy 1 Lot Apr 330 CE         

Sell 1 Lot Apr 340 CE          

Sell 1 Lot Apr 350 CE

Target: Rs 6,000

Stop Loss: Rs 500  

Rationale:
 
·  Tata Steel is in Long- long Unwinding Cycle

·  Week gone by saw Metal sector outperforming

·  Put built-up at 320 could provide immediate support, whereas unwinding in 330 CE will provide further thrust towards 340

·  Considering higher theta decay due to few trading days left to expiry and falling volatility, Call ladder Spread is recommended
 

Disclaimer: Motilal Oswal Securities ( MOSL ) is regulated by the Securities and Exchange Board of India ("SEBI") and is licensed to carry on the business of broking, depository services and related activities.Motilal Oswal Securities Limited is registered under SEBI (Research Analysts) Regulation 2014 SEBI Registration No :-INH000000412.MOSL, the spokesperson or his relatives, do not have financial interest in the securities mentioned above. The spokesperson has not served as a director, employee or officer at the subject company in the last 12 months. MOSL or its associate might be involved in market making for the subject company or have potential conflict of interest.

Shubham Agarwal is a head of Quantitative Research, Motilal Oswal Securities