Laying out his F&O strategy for ICICI Bank, VK Sharma of HDFC Securities suggests constructing a bear spread where traders buy a 1,040 Put, which was available at around Rs 26, and sell the 1,000 Put at around Rs 14. "So your cost would come to around Rs 12 and the maximum profit that you will have in this strategy would be around Rs 28. The benefit to cost ratio would come to something like 2.3:1, which I think is a favourable one, and people can do it if the market is going to go the bearish way on Monday," he told CNBC-TV18 in an interview.
Commenting on the high beta Reliance Communications stock, Sharma says: "I am suggesting buying 140 Call, which was available at around Rs 5. Keep a stop loss at Rs 3.50. So you will lose only Rs 1.50 if the call goes wrong with a target of around Rs 10. The risk-to-reward ratio pretty good in case the call goes directionally right".