Derivative Big Shot-Indian Market View, VOL-016

Learning Quote: Box Spread (Arbitrage): Box Spread (also known as Long Box) is an arbitrage strategy. It involves buying a Bull Call Spread (1 ITM and 1 OTM Call) together with the corresponding Bear Put Spread (1 ITM and 1 OTM Put), with both spreads having the same strike prices and expiration dates. The /strategy is called Box Spread as it is combination of 2 spreads (4 trades ) and the profit /loss calculated together as 1 trade. The total cost of box remain same irrespective to the price movement of underlying security in any direction. The expiration value of the box spread is actually the difference between the strike prices of the option involved. The long box strategy is opposite to Short Box strategy. It is used when the spreads are under-priced with respect to their combined expiration value. 

Nifty Futures: 15006.80 (-0.72%)

Bank Nifty Futures: 35922.60 (-1.86%)

USDINR: 72.94 (-0.26%)

India Vix: 22.25 (+3.30%)

FII Data (Approx.)

Institution/Daily Net Position/Monthly Net Position (Derivatives, In Crores...)

FII (+118cr.) (+23874cr.)

DII (-1274cr) (-16638cr.) 

FII Futures (-1213cr.) (-2750cr.)

FII Options (+3648cr) (+15910cr.) 

Put Call Ratio/Maximum Pain

NIFTY 1.19/14900

BANK NIFTY 0.76/35700

Stocks in the News

NTPC - On successful commissioning, 5 MW last part capacity for 20 MW Auraiya Solar PV Project at Auraiya, UP, has been declared on Commercial Operation w.e.f. 00:00 Hrs. of 20.02.2021.

Nifty- Option Chain

Maximum CE open interest of 34.07 lakhs contracts was seen at 15,200 strikes, which will act as a crucial resistance, while maximum PE open interest of 21.30 lakh contracts was seen at 14800 strikes. 

Nifty has key support levels for the day are 14940 followed by 14871. If the index moves up, the key resistance levels to watch out for the level of 15073 and 15150.

Bank Nifty- Option Chain

Maximum CE open interest of 6.98 lakhs contracts was seen at 36,500 strikes which will act as a crucial resistance, while maximum PE open interest of 10.50 lakh contracts was seen at 35,000 strikes. 

Bank Nifty has key support levels for the Bank Nifty are 35600 followed by 35300. If the index moves up, the key resistance levels to watch out for are 36300 and 36500.

Top Pick

Drreddy and Hindustan Unilever futures bounced back sharply from lower levels. Buy on dips will be fruitful for short term in both stocks. Traders can go long in Drreddy futures as a positional call around 4700 with stop loss below 4400 for the upside target of 5400.

Buy Dr. Reddy 4800 CE above 68. Stop loss - 40. Target-110.

Buy HUL 2200 CE above 25. Stop Loss-10. Target-50.

Read disclaimer before investing. For queries, contact your RM.

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