Weekly Strategy, October Week 5 | Stocks and Commodities

P R Sundar, Aditya Trading Solutions

Weekly Investment Strategy:

Strategy: Sell ICICI Bank 980 Put option and 1100 Call option.

1. ICICI Bank has declared very good results.
2. The stock is likely to be rerated.
3. Hence the downside is very limited.
4. In the November series, Call option premiums are higher than Put option premiums.
5. This shows the bullishness in this stock.
6. But the stock may not go up immediately as uncertainties regarding RBI policy and Fed policy are there in the next few days.
7. So any big up move can come only after the expiry.
8. So it is safe to sell 1100 Call option.
9. Since the down side is limited it is also safe to sell 980 Put option.
10. Total premium works out to be Rs 7.90 and that works out to be Rs 1975 per lot.
11. Since there are only four trading sessions for the expiry this return is very good.