Reliance Indutries, State Bank of India likely to keep Nifty under pressure: Amit Gupta

Amit Gupta of ICICIdirect told CNBC-TV18, "If we look at the Call options, in Nifty we have seen that writing happening and in Call options, also that writing has just started. So, State Bank of India (SBI) or Reliance Industries kind of Nifty heavyweights, still around 8-10 percent higher strikes, the premiums are higher because of this volatility rise and that is why I think because only 10-12 sessions are left for expiry, I think if somebody can start writing these Call options, it gives you good money per lot. So, we are getting almost Rs 9,000-10,000 per lot if we are doing this particular trade."

"For example, SBI, which is near Rs 285, 310 and 320 Call strike is getting written now and still at around Rs 310 we are getting a premium of Rs 5-7 with higher lot sizes. So if somebody write this, I think they can make good money because eventually these premiums will go off."

"The same is the case with RIL where the stock is trading near Rs 900 and we have seen that 940 and 960 Call strikes are being written. So what we recommend to our clients is writing 940 Call strike which is near Rs 9-10 and that is where I think we are betting on that these premiums will go off because both of these underlines may not be able to pull back sharply towards the settlement. The reason being the long liquidation is coming out."

"In SBI, we had seen from 65 million to 95 million, the open interest had risen, these were the long positions after the recapitalisation. However, once the yields have started moving up, there is a clear evidence of long liquidation there. So that is why these stocks may remain little sluggish."

"The same is happening with Reliance where almost 20 percent of long liquidation have been seen. It was not coming below Rs 900 since November but once it started coming below that level, I think further long liquidation may be seen."

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Amit Gupta

Head of Derivative|ICICIdirect

• 
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• 
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"So from Nifty per se, these two heavyweights can keep the index under pressure for some time and that is why writing Call options may be a wise decision in this particular expiry," he said.

Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd