F&O Strategy: Buy DLF Put Option

The stock of DLF (₹631.70)  finds immediate support at ₹612 and ₹557. A close below the latter will change the outlook negative and trigger a sharp fall in the stock.

On the other hand, resistance levels are ₹686 and ₹760. A recovery above ₹686 will negate the current negative outlook for DLF. Broadly, we expect the stock to move in a narrow range with downward bias.

F&O pointers: On Friday, DLF May futures closed at ₹633.20 against the spot price of ₹631.70. This contract witnessed a drop in open interest in the last ten days as the stock turned volatile. This indicates traders’ nervousness to carry over the positions.

Option trading indicates that the stock could move in the ₹600-700 range.

Strategy: Consider buying a 630-put that closed with a premium of ₹24.40 on Friday. As the market lot is 825 shares, this would cost traders ₹20,130 per lot. This would be the maximum loss which will happen if the stock of DLF rises sharply.

Aim for a target of ₹32 while keeping initial stop-loss at ₹18. Stop-loss can be shifted to ₹24 if the premium moves past ₹26. Traders can use stop-loss deftly to protect profit from thereon as DLF, being one of the highly volatile counters, can change direction quickly, possibly leading to a loss. 

If the stock opens sharply lower or higher on Monday one can avoid this trade.

Follow-up: Recommendation on Angel One would have provided profits.

Note: The recommendations are based on technical analysis and F&O positions. There is a risk of loss in trading.

Published on May 10, 2025