Tata Motors is trading in a range of 210 and 160 since 9 weeks and in this process it has formed a symmetrical triangle formation. The volatility and volumes both have come down due to this sideways movement. Now, since it has reached towards the apex of the triangle, the expansion of volatility is expected which will get minimum of Rs50 movement on either side. Hence, Way2Wealth think Long strangle should be a good strategy.
The strategy consists of buying 1 lot of Tata Motors Jan 200 Call option Dec. at Rs3.30 and buying 1 lot of Tata Motors Jan 160 Put option at Rs2.75. The premium outflow in this strategy would be Rs6.05. Initial outflow is estimated to be Rs12100 at the time of initiation of strategy.
Buy 1 lot of Tata Motors Jan. 200 Call around 3.30
Buy 1 lot of Tata Motors Jan. 160 Put around 2.75
No comments:
Post a Comment