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Presently I’m holding the following options: 3 lots of Coforge February expiry 4450-strike call bought at ₹110; Reliance Industries February expiry 2360-strike call bought at ₹45. Kindly advise – Nagaraj
Coforge (₹4,229.3): The stock began the current week with a considerable gap-down leading to significant drop in options premium. The 4450-strike call closed at ₹19.2 on Thursday. That said, the stock has recovered sharply after taking support at ₹4,000 where a rising trendline also coincides. The price action hints at further rally and hence one can hold the option. But, note that the option premium may not rise to your purchase price as we are nearing the expiry. You can exit by minimising the loss. Liquidate the option at the prevailing price when the stock hits ₹4,425. The price band of ₹4,425-4,500 is a strong resistance.
Reliance Industries (₹2,430.5): The stock has seen a good rebound this week and the charts show that it could extend the rally to ₹2,550-2,600 region. The 2360-strike call closed at ₹74.75 on Thursday and it is in-the-money now. If it expires so, you will have to take delivery needing more money to be pumped in. Besides, although the stock appears to rally further, there is a chance for a corrective decline bringing down the call option price. Therefore, we suggest exiting 2360-call at a profit now and buy an option from the March series so that you’ll have more time for the upside to play out.
Send your queries to derivatives@thehindu.co.in
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