Buy Bajaj Auto 1950 call, sell 2 lots of 2000 calls: Desai

Bhavin Desai of Motilal Oswal told CNBC-TV18, "In Bajaj Auto we have seen heavy over activity in yesterday’s trade, price action across the stocks was not so encouraging except for auto. Maruti Suzuki has to exclude, however we saw some bit of positivity coming into Mahindra and Mahindra and Tata Motors."

He further added, "Bajaj Auto was something that drew our attention to the open interest activity where we did see decent jump in open interest in yesterday’s trade. So that view seems to be hanging on to the stock even in today’s session. The stock is trading around Rs 1950-1954. One can deploy a call ratio spread with excessive speed of time decay and two days to expiry. Buy a 1950 Call and sell two lots of 2000 Calls simultaneously, keeping a loss stop loss of above Rs 1000 and a profit target of about Rs 3500."