Weekly Strategy, November Week 3 | Stocks and Commodities

P R Sundar, Aditya Trading Solutions

November 19, 2013
Time: 9.30 pm

Weekly Strategy: Sell March 2014 expiry Nifty 5500 Put option and 7000 Call option.

1. First we are sorry, due to our busy schedule, we could not post this article on Sunday.
2. Again we promised to post on Monday which also we failed.
3. In fact for the past few days I have been sleeping only for 5 hours due to the heavy workload.
4. Coming back to the strategy, FIIs continuously buying for more than 30 trading sessions.
5. But in all those sessions uniformly DIIs are sellers.
6. DIIs are selling aggressively.
7. So it is tug of war.
8. But ultimately FIIs will win and markets will breakout on the higher side.
9. But once again, when Nifty crosses 6500 huge selling will come.
10. Due to global cues and optimism around, our downside is limited.
11. Hence we suggest selling 5500 Put option.
12. But at the same time, Fed tapering fear in December, US govt. shutdown fear in January, US Debt ceiling fear in February, election uncertainty in March will check the up move in the market. So Nifty crossing 7000 is also not easy by March 2014.
13. So we suggest selling 7000 Call option.
14. 5500 put option closed at Rs 60.50 and 7000 Call option closed at Rs 70.55 in today's trade.
15. The return works out to be more than 6% for a span margin of Rs 20000.
16. Considering the low risk, it is a good return.