INSUBCONTINENT EXCLUSIVE:
By MOTILAL OSWAL SECURITIESOption WritingSTRATEGY 1Writing against Cash / Fut HoldingWriting against Cash / Future HoldingSell CIPLA 660 CE
25-OCTOBER-18 at Rs 4.85
Target Level : 0.25
Stop Loss Level : 7.20
Gross Monthly Yield : 2 per cent
ROI : 5.50 per cent
Margin : Rs
83,000
Days to Expiry : 11
Writing with HedgingLeg 1: Sell CIPLA 660 CE 25-OCTOBER-18 at Rs 4.85
Leg 2: Buy CIPLA 700 CE 25-OCTOBER-18 at Rs
1.65
Target Level : 0.10
Stop Loss (Spread) Level : 4.80
Gross Monthly Yield : 1.35 per cent
ROI : 3.80 per cent
Margin : Rs 81,500
Days to
Expiry : 11
STRATEGY 2Writing against Cash / Future HoldingSell SBI 295 CE 25-OCTOBER-18 at Rs 1.55
Target Level : 0.15
Stop Loss Level :
8.80
Gross Monthly Yield : 1.45 per cent
ROI : 4 per cent
Margin : Rs 1,05,000
Days to Expiry : 11
Writing with HedgingLeg 1: Sell SBI 295
CE 25-OCTOBER-18 at Rs 1.55
Leg 2: Buy SBIN 310 CE 25-OCTOBER-18 at Rs 0.65
Target Level : 0.10
Stop Loss (Spread) Level : 1.35
Gross
Monthly Yield : 0.85 per cent
ROI : 2.35 per cent
Margin : Rs 1,02,000
Days to Expiry : 11
Pair TradingSTRATEGY 1Leg 1 : BUY INDUSIND BANK 1
LOT
25-OCTOBER-18 at Rs 1,656.80
Leg 2 : SELL BHARATFIN 1 LOT
25-OCTOBER-18 at Rs 1,024.70
Tenure : 6-7 Days
Target Profi t : 2.40 per
cent
Stop Loss : 1.20 per cent
Margin : Rs 1,48,000
This pair has 93 per cent correlation over the last one year
It has trade lot ratio of 1 with price ratio of 1.62
Spread is trading as per its 2 Standard Deviation and has been moving in tandem for last eleven months since November 2017
Spread keeps on giving the opportunity to get the spread difference of 1 to 2 per cent in between even after being in tight spread
range.
Pair TradingSTRATEGY 2Leg 1 : BUY HINDUSTAN UNILEVER 1 LOT
25-OCTOBER-18 at Rs 1,558.95
Leg 2: SELL DABUR 1 LOT 25-OCT-18 at Rs
408.25
Tenure : 7-8 Days
Target Profi t : 3.90 per cent
Stop Loss : 2.05 per cent
Margin : Rs 2,88,000
This pair has 92 per cent correlation
Pair has Trade lot ratio of 1.1 with price ratio of 3.82
As per the statistical data, spread of pair is narrowing and after the recent data setup it may diverge towards upper band of 2SD zone.
