F&O Strategy: Nandish Shah recommends a Bull Spread on HCL Tech for August

The technical analyst from HDFC Securities recommends buying HCLTECH 960 Call and simultaneously selling 1000 Call of the August series.

Derivative Strategy

BULL SPREAD Strategy on HCLTECH

Buy HCL TECH (25-August Expiry) 960 CALL at Rs 22.50 & simultaneously sell 1000 CALL at Rs 9

Lot Size 700

Cost of the strategy Rs 13.5 (Rs 9,450 per strategy)

Maximum profit Rs 18,550 If HCL TECH closes at or above Rs 1,000 on 25 August expiry.

Breakeven Point Rs 973.5

Approx margin required Rs 23,500

Rationale:

• We have seen minor long build up in the HCL Tech futures on Thursday, where we have seen 1 per cent addition (Prov) in Open Interest with price rising by 0.10 per cent.
   
• Short term trend