I have bought ICICI Bank 1020-strike call option for ₹18. Can I hold or exit? – Anji Ramu

ICICI Bank (₹1,065): A couple of weeks back, this stock began its latest leg of rally on the back of the support at₹985. It broke out of a resistance at ₹1,050 this week, improving the probability of further gains. We expect the stock to touch ₹1,100 and then ₹1,150 in the short-term.

Since the chances for more upside is high, buying call options is a good strategy, especially when the momentum is in favour of the bulls. Given the price at which you have bought the option, we assume it is of February series.

In that case, since the call option you hold has become in-the-money (ITM), you might have to take delivery of ICICI Bank shares if you leave it to expire. This will require huge margins.

Also read: F&O Query: Should you hold Reliance Industries call options? 

So, if taking delivery of ICICI stock is not your objective, we would recommend you exit the February call now and initiate fresh longs in March call options.

Exit the call longs when the underlying stock price hits ₹1,100, a resistance. You may consider rebuying after ₹1,100 is decisively breached.

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