BSE Sensex (16154.62) and Nifty (4866) closed up 2.0% and 2.4% respectively last week.Nifty Future January was quoting at 20 points premium.Nifty call option January 4900 was very active.Support for Sensex is at 15800. Resistance for Sensex is at 16380 .Support for Nifty is at 4750 and resistance at 4950.
Expectation of RBI cutting the interest rates in the coming months to boost the slowing economy invite the buying at lower levels.
ICICI Bank and Tata Steel added Open Interest in January series.Huge position was build up at Tata Steel January Call Option Strike Price 420.Good build up was also seen at Infosys January Call Option Strike Price 2700..
Strategy for Futures Option players.
1)IDEA( 85.45) lot size 4000 shares
Buy One Call Option of January Strike Price 85@3.25 Rs
Sell One Call Option of January Strike Price 90@1.15 Rs.
Premium .Paid=3.25*4000=13000.00 Rs.
Premium Received=1.15*4000= 4600.00 Rs.
Net Premium Paid=13000.00-4600.00=8400.00 Rs.
Maximum Profit==90-85 =5*4000=20000-8400.00=11600.00 Rs.-
Maximum Loss= 8400.00 Rs.
Break Even Price=87.10
2)TATA STEEL(416.75) Future-Lot Size 500 shares.
Buy One Lot January Future @416.75 Rs
Sell One Call Option of January Strike Price 420@11.20 Rs.
Premium Received=11.2*500=5600.00 Rs
Maximum Profit=420-416.75==3.25*500=1625.00 + 5600.00=7225.00 Rs.
Max Loss=Unlimited.
Trading Idea
1)Reliance Capital(299.65) Buy this stock in decline and trade .
2)RCOM(87.55) Buy this stock in decline and trade
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By
Bullet Advisory.
Narendra Nainani
Mobile No. +919898162770
Website www.subscriptionnarendranainani.blogspot.com
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