Sell Coal India 290 Put: VK Sharma

VK Sharma, Head of Business, Private Client Group at HDFC Securities told CNBC-TV18, "You have a Nifty stock - Coal India which is doing pretty well at around Rs 288 which is quoting from a dividend perspective. Last year, it paid Rs 27.50 and that work out to a mind boggling 9.5 percent dividend yield. Tax free in the hands of the investor and obviously, one would like to think that, last it paid Rs 20. So, let us assume it doesn't pay Rs 27.5, it pays Rs 20. How can an investor increase the yield even if the government was to pay Rs 20.""One way to do is sell the 290 Put, you get around Rs 8 for the next month, you pocket it if it doesn't come down. If it comes down, let us say to Rs 290-280 you get those Rs 8 anyway and you buy the stock at the end of the settlement. So, your yield will definitely be a 9.5 percent in case you buy," he said.