Consider put option on SBI

The long-term positive outlook remains intact for State Bank of India (₹313). The stock finds an immediate support at ₹284 and a crucial one at ₹273. On the other hand, it finds immediate resistance at ₹329, and a conclusive close above this level will ensure another rally in the stock. It is likely to move in a sideways manner before charting a clear trend.

F&O pointers: SBI December futures have witnessed accumulation of long positions in the last few days. From 47.31 lakh shares, open interests have shot up to 6.40 crore shares, signalling build up of long positions, Options trading indicates that the stock will hover in the ₹300-330 range.

Strategy: Traders can consider buying ₹300-strike put on SBI, which closed with a premium of ₹5.05, which means the maximum loss in this strategy would be the premium paid — ₹15,000 (as the market lot is 3,000 shares). This will happen if SBI closes at or above ₹300.

SBI will be volatile, as the Reserve Bank of India will meet on December 5 and 6 for the monetary policy. Though there is a clamour for a rate cut, it is expected to hold the rates. However, any surprise — positive or negative — will impact the stock strongly.

Profit potentials are huge if the stock tumbles sharply. Hold the position till expiry or the loss mount hits ₹7,000 or SBI rises to ₹330 level.

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