iCharts Discussions

ud1981 · White Belt Joined: 21 May 2014 Posts: 14

Bought HDFC BANK 860 Call at Rs 8.8. It is trading at Rs 7.

I bought it after looking at the trendline 5DMA & the expansion of Bollinger band that seems to be on the upside. Also, I could see lots of OI builtup at 900 levels, which means this stock should rise in the next 1-2 sessions. Any comments on the buy?

venkkatshiv · White Belt Joined: 16 May 2008 Posts: 90

[quote="ud1981"]Bought HDFC BANK 860 Call at Rs 8.8. It is trading at Rs 7.
SIR , ANY UPDATES IN HDFC BANK 860 CE I TOO HOLD 2 LOTS @ 4.5 PL.REPLY

ud1981 · White Belt Joined: 21 May 2014 Posts: 14

I sold it at a loss yesterday when Nifty made a dip. I guess you should hold it now as Nifty is holding onto 7500+ levels.

ud1981 · White Belt Joined: 21 May 2014 Posts: 14

HDFC Bank is a clear sell. It could not hold onto the base for the last 5 days which is at 830. Please exit as lower levels may be coming.

I had to exit yesterday, not worth entering in this volatility. Defensive stocks may do better, please look at IT or Pharma.

ud1981 · White Belt Joined: 21 May 2014 Posts: 14

My comments are based on the attached graphs that I had to analyse.

Gemini · White Belt Joined: 28 Apr 2009 Posts: 166

One observation: usually, OTM Call ( that is call strike price higher than stock CMP) build-up or OTM Put (that is put strike price lower than stock CMP ) indicates selling of that strike price by the experienced option players who make money by earning on premium that they get by such option sell. (Some people also sell the call to collect "rent" for the stocks they own and sell puts to collect "money" to buy the stock later if the price falls )

For example, the OI build-up that you saw for HDFC Bank 900 strike price indicates that such players sold the 900 call and pocketed the premium. (Please be very careful with such option strategy as there is limited profit and unlimited loss).

Option based strategies are complex and proper study is advised.