I’m holding IIFL 450-PE bought for ₹16.5 and Trent 5400-CE bought for ₹160. Both are August expiry. What levels should I aim to book profit or loss? – Rajiv Gupta, Luckow
IIFL Finance (₹453)
The stock has been consolidating over the past few sessions. But the chart shows that the bias has been bearish in the last three weeks. It is trading below a key resistance at ₹460 and so long as this hurdle holds true, the probability of further fall will remain high.
Given the prevailing chart set up, we expect the stock to drop to ₹400-410, which is a support band. Projecting that the stock price can fall to these levels, the premium of 450-put, which is currently trading at ₹10, can go up to ₹35 or ₹40.
So, the target can be ₹35. Place a stop-loss at ₹6. When the option premium rises to ₹20, revise the stop-loss to ₹10. Move the stop-loss further higher to ₹20 when the premium hits ₹30. Book profits at ₹35.
Trent (₹5,410)
The stock has been in an uptrend since the beginning of this month. The price crossed over the 21-day moving average early last week.
However, there is a barrier ahead at ₹5,500. If this level is breached, the stock can rally to ₹5,820 – its 200-day moving average. On the other hand, if there is a fall, it can find support at ₹5,250 and ₹5,100.
As it stands, the likelihood of a breakout of ₹5,500 is high. If that occurs and the stock price touches ₹5,820 before expiry, the premium of 5400-call can increase from the current level of ₹135 to ₹400.
In case the stock slips below ₹5,250, it can potentially lead to a further fall, significantly reducing the probability of an upswing to ₹5,820 before expiry. So, you can hold this trade with a stop-loss at ₹50.
When the option price rallies to ₹250, trail the stop-loss to ₹175. On a rally to ₹300, tighten the stop-loss further to ₹250. Book profits at ₹350.
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Published on August 12, 2025
