F&O Strategy: Nandish Shah recommends a Bull Spread on Tata Consumer

The stock price has broken out on the daily chart with higher volumes, where it closed at the highest level since November 2021

BULL SPREAD Strategy on TATA CONSUMER

Buy TATA CONSUMER (29-Sept Expiry) 850 CALL at Rs 27 & simultaneously sell 870 CALL at Rs 19

Lot Size: 900
 

Cost of the strategy: Rs 8 (Rs 7,200 per strategy)
 

Maximum profit: Rs 10,800 If Tata consumer closes at or above Rs 870 on Sept 29 expiry
 

Breakeven Point: Rs 858
 

Approx margin required: Rs 34,000
 

Rationale:

• We have seen long build up in the Tata comm futures, where we have seen 12 per cent addition (Prov) in Open Interest with price rising by 4 per cent.
   
• The stock price has broken out