Feb 16, 2017 11:05 AM IST | Source: CNBC-TV18

Buy Dewan Housing Finance 290 Put, sell 280 Put: VK Sharma

VK Sharma of HDFC Securities is of the view that one can buy Dewan Housing Finance 290 Put and sell 280 Put while in case of Hindustan Zinc one can buy 290 Put and sell 285 Put.

VK Sharma of HDFC Securities told CNBC-TV18, "In Dewan Housing Finance, I am suggesting to buy the 290 Put and sell the 280 Put. This will essentially to make the cost of acquisition, creation of this bear spread will be Rs 2.5 and the maximum profit that one can hope to make is Rs 7.5." 

"In case of Hindustan Zinc, I am buying the 290 Put and selling the 285 Put. The cost will be Rs 3.50 and Rs 2.30 respectively, so the cost comes to Rs 1.20 of constructing this bear spread and the maximum profit that one can hope is Rs 3.80. This will obviously mean that people who want to change their positions need not create this spread because the cost of exiting this bear spread would be higher."

"Therefore if you want to just protect then you can hold on to the series and in case the stock do go up then cost of protecting essentially comes down through construction of bear spread," he said.
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