Weekly Strategy, April Week #1 | Stocks and Commodities

Sponsored by

March 30, 2014
Time: 9.30 am

Weekly Strategy: Sell Bank Nifty 11000 Put option and 14200 Call option.

1. Markets closed at all time high on Friday.
2. Banking stocks are very bullish.
3. Though Nifty is at all time high, bank nifty is about 500 points below its all time high.
4. So there is more room for further appreciation.
5. SBI is less than half of its all time high.
6. Also due to the appreciation in Rupee, lower inflation, RBI is likely to maintain status quo on Tuesday.
7. So everything looks favorable for banks.
8. So selling 11000 Put option is very safe.
9. At the same time, Bank Nifty rising beyond 14200 is very dfficult.
10. Bank Nifty 11000 Put option closed at Rs 20 and 14200 Call option closed at Rs 48 on Friday.
11. This workout to be a return of about 8.5% for the span margin of Rs 20000.
12. Considering the lower risk, this return is very good.
13. Important Note: Monday, if higher strike is opened, like 14300, 14400, then choose those strike instead of 14200 as the banking stocks are bullish.