F&O strategies for HDIL, M&M

HDIL

 

LONG PUT BUTTERFLY

 

BUY 55PE 1 LOT

SELL 50PE 2 LOTS

BUY 45PE 1 LOT

 

Target Profit: Rs 6000

Stop Loss: Rs 1500

Rationale:

The stock has added shorts in last expiry

Trading below the lower band opens up the immediate downside of about ~20%

Considering the high volatility it makes sense to trade with a Put Butterfly

 

M&M

Bull Call Spread

BUY 1160CE

SELL 1200CE

 

Target Profit: Rs 5000

Stop Loss: Rs 2000

Rationale:

The stock has witnessed fresh longs on Tuesday’s trading session

Higher Calls of 1120 and 1140 has witnessed short covering, opening up a headroom up to 1200 (highest build up for calls)

Since there is still meaningful time to the expiry it makes sense to construct a Bull call spread strategy

 

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. MOSL is in the process of getting registered under SEBI - Research Analyst Regulations. MOSL and its associates have a financial interest in the securities mentioned above however they do not have actual/ beneficial ownership of 1% or more securities of the subjecct company at the end of Jan 2015.  The spokesperson or his relatives, do not have a  financial interest.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

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