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Should I sell the December expiry 3200/3250 strike put option on Asian Paints or buy a future contract? Share your views – Pravin Goswami
The stock of Asian Paints, trading at around ₹3,185 at the time of writing, faces resistance at ₹3,200. So, before this hurdle is breached, it might not be a good idea to implement bullish strategies.
Once the resistance at ₹3,200 is breached, you can consider selling the 3200-strike put option rather than buying a futures contract. Because there are barriers above ₹3,200 at ₹3,250 and ₹3,350, there is a chance the stock will stay within the ₹3,200 and ₹3,350 band until the end of December expiry. In that case, you can gain from time decay if you sell options.
That said, a breakout of ₹3,350 can result in a quick rally to ₹3,585. So, if the stock breaches the ₹3,350 level, you can consider liquidating the 3200-strike put short position and then go long on futures for a target of ₹3,585.
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