The long as well as the immediate term outlook for YES Bank (₹882.3) is positive. After moving sideways in the last three months, the stock may witness a break out. If the current trend sustains, YES Bank will touch ₹1,025 and even ₹1, 150.
For that to happen, YES Bank has to sustain above ₹882 and conclusively close above ₹892. Only a close below ₹793 will negate the short-term positive outlook.
The maximum loss in the strategy is the premium paid, which works out to ₹6,312.25, given the market lot of 250 a contract. However, profit could be unlimited, if YES Bank moves up sharply. We advise traders to exit from the position, if the premium slips to ₹10. On the positive side, traders could set an initial target of ₹75.
Follow-up: Investors can exit from SBI position, if the 280-call option premium slips to ₹4 or rises to ₹22.