Buy Wipro 520 Call, advises Amit Gupta

Amit Gupta of ICICIdirect told CNBC-TV18, "I think the IT pack can still be looked at for this expiry perspective because the index heavyweight, Tata Consultancy Services (TCS) saw very significant cut in the open interest of the Call options because these were all Call writing positions, but now because of this buyback which was announced and it is very near, we saw that 2,400 Call in a single day, almost 4,000 contracts were closed. So, it is a very significant cut and then the stock moved up."

"Now I think it is the time when we should look at the other stocks from this IT pack, especially Wipro. Open interest is at the life highs and majority of the positions are in the short side. If you look at the last two months average, it is near Rs 490-495 levels. The stock has started moving up above Rs 520. The 520 Call was very high in terms of open interest. It has already moved to Rs 525. I think for this particular expiry, another two days are there, we can start buying 520 Call options in the range of Rs 5-6. I think the loss can come only if it closes below Rs 520. The chances of this looks rare and it is possible it can move towards Rs 540-542. So, in that case your premium also will spurt and you can start making money," he said.

"From the option segment, because expiry is quite near, option writer’s perspective in the stock options, we have two ideas. One is you can sell Hindalco Industries Put option which is 190 Put option. It is close to Rs 192. So, it is very near Put option that we are writing. However, because the metal prices have started reverting up, so, there was almost 10 percent of correction and then we have started seeing this particular move in metals. It is possible Hindalco which had remained quite range bound, it did not fall like Tata Steel or other stocks because Tata Steel fell by almost 10 percent, Hindalco remained in the range of Rs 185-200. The short traders I think in Hindalco may get stuck up in this particularly expiry. Rollovers still are not that higher in Hindalco; that means the writing positions or the shorting positions in futures are getting closed and that is why the stock can move towards Rs 198-199. So, we are writing the Put option of 190 which is around Rs 2. So, it can be an easy trade with certain stop loss you can do it."

"In State Bank of India (SBI) we are selling the Call option. We are selling the 295 Call option because the scenario has got a little changed after the recent results from the PSU banking heavyweights. We are seeing that the second tier of PSU banks have come back to the same level from where they started. Some of the stocks have come down. So, it is a clear long liquidation. In SBI 300 Call options being written heavily so I don’t see the stock moving above Rs 300 in the coming two days. So, because the premium is not higher there, we are coming down to 295 Calls. We are writing this particular Call for the two days perspective and I think the expiry of this particular stock can be below this level and this is where you can make money."