Short ITC 300 Put, 330 Call: Siddarth Bhamre

Siddarth Bhamre of Angel Broking told CNBC-TV18, "I have understood that if goods and services tax (GST) gets implemented then ITC will have to shell out more taxes. However, what we are talking is something which will happen after one year or probably one-and-a-half years and we all know that this kind of news are very regular to ITC. We have seen sudden spike in implied volatility yesterday from 21 to 28 and if I look at a range bound stock, which ITC is since several months, from higher end of the range, which is around Rs 350-360, it has come down to lower side of the range which is around Rs 300.""I do not see ITC going significantly below Rs 300 neither above Rs 330-340 zone in current context. Implied volatility have gone up, options have become expensive. I think this is good time to form short strangle and hence I would strongly recommend to short 300 Put and 330 Call for a combined premium of Rs 7. I expect the stock to toggle in this range. Today the stock might show bounce or go down by 1-2 percent more but unlikely that it would breach this range," he said.