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Last Updated : Sep 11, 2015 03:23 PM IST | Source: CNBC-TV18

Here are top trading ideas from JK Jain

Watch the interview of JK Jain of Karvy Stock Broking with Latha Venkatesh & Ekta Batra on CNBC-TV18, in which he shared his readings and outlook on Futures and Options (F&O) side of the market, specific stocks and sectors.


Watch the interview of JK Jain of Karvy Stock Broking with Latha Venkatesh & Ekta Batra on CNBC-TV18, in which he shared his readings and outlook on Futures and Options (F&O) side of the market, specific stocks and sectors.

Below is the verbatim transcript of JK Jain's interview with CNBC-TV18

Ceat

Given a covered call strategy in Ceat wherein we are recommending to buy futures at a current market price of Rs 1,220 and simultaneously sell the Call options of 1300 which is trading around Rs 40. The breakeven for this strategy would be Rs 1,118."

"If the stock expires below Rs 1,118 then one would lose into this strategy. However from a trading perspective one can keep a stop loss of Rs 1,150 and can create an covered Call strategy. On the upside we are expecting the stock to head towards Rs 1,300 wherein one can make Rs 120 of gains form the current level," he said.

"The logic behind this strategy is that there is huge short position that are build up in Ceat. Open interest has doubled since the inception of contract and the stock is trading at Rs 20-25 discount. The stock has outperformed significantly and trading at its lifetime high."

"Clearly it is indicating that all these short positions have got stuck and generally whenever the stock trades at a steep discount and trades at lifetime high we see a good amount of short covered rallies towards expiry. So, we expect a short covering rally in this stock and head towards Rs 1,300 and above in the coming days. On that basis we are recommending a covered Call strategy in Ceat," he added.



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First Published on Sep 11, 2015 12:39 pm
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