Weekly Strategy, March Week 1 | Stocks and Commodities

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March 2, 2014
Time: 12.15 pm

Weekly Strategy: Sell Auro Pharma 470 Put option and 600 Call option.

1. Auro Pharma keeps hitting new 52 week high.
2. Last Friday, it hit record high.
3. This stock is firmly bullish.
4. It took support at 480 multiple time in the February series.
5. So it is very safe to sell 470 Put option.
6. Last Friday, 590 Call option hit a high of Rs 8.40.
7. Since the stock closed at 52 week high and hit intraday high of 542, 600 Call option may be opened for trading on Monday.
8. If 600 call is opened for trading, then selling that call will be safe as it is nearly 15% higher from the current level.
9. Pharma sector keeps hitting record high almost every day.
10. So it can not continue its momentum for another 10 to 15%.
11. So selling 600 Call option will be safe.
12. Auro Pharma 470 Put closed at Rs 4.90 on Friday.
13. Auro Pharma 600 Call was not trading on Friday, on Monday it may be released for trading.
14. If it is opened, it is likely to trade around Rs 5.
15. So the total premium would be around Rs 20000.
16. The span margin will be around Rs 160000.
17. The return works out to be more than 12%, if Auro Pharma trades between 470 and 600.