F&O Call: Nandish Shah suggests Bull Spread strategy on HCL Tech

The derivatives analyst from HDFC Securities suggests to BUY 1,150 Call for February 23 expiry of HCL Technologies, and simultaneously SELL 1,200 Call of the same series

Derivative Strategy

Bull Spread strategy on HCL Technologies

Buy HCL TECH (23-Feb Expiry) 1,150, CALL at Rs 23.50 & simultaneously sell 1,200 CALL at Rs 7.50
 

Lot Size: 700

Cost of the strategy: Rs 16 (Rs 11,200 per strategy)

Maximum profit at Rs 23,800 If HCL Tech closes at or above 1,200 on 23 February expiry

Breakeven Point: Rs 1,166

Approx margin required: Rs 28,100

Rationale:

We have seen long build up in the HCL Tech Futures on Thursday, as we saw 3 per cent addition (Prov) in open interest, with price rising by 1.5 per cent.