Buy Hindalco Industries 200 Call, Bank of Baroda 190 Call: Amit Gupta

Amit Gupta of ICICIdirect told CNBC-TV18, "Among the Call options, we are buying Hindalco Industries and Bank of Baroda. We are buying almost the at-the-money (ATM) Call options because the reason being is that if you look at the metal pack, Tata Steel has given up by almost 10 percent, but Hindalco has remained there only near Rs 200 levels. There was QIP in the stock and then it is stuck up in the range of Rs 180-200. If you observe now, 200 Put has the highest Put base in Hindalco. So, that means now the downsides are very limited in the stock and it is possible that it can move towards Rs 220-230 levels. Almost 42 percent of short closer has been seen in the last couple of series in the stock when it was in this range of Rs 180-200."

"So, I think the platform is ready now for it to start moving up and that is why the Call options which have remained subdued because when it was in the range, people were shorting the Calls. I think the IVs are lower, so, one can start buying 200 Call option of Hindalco."

"Another one is Bank of Baroda because after couple of years, from 2015, it was facing very stiff resistance near Rs 180 levels. Now, it has come above that and we have seen that almost 35 percent of short closer in the stock. This is the first time what is happening in Bank of Baroda near this resistance once it has surpassed this. So, the Call positions are moving higher. I think the out-of-the-money (OTM) Call buying is definitely happening in this and we are buying 190 Call option now," he said.

"Looking at this particular pattern it is possible that in this particular series only it can move beyond Rs 200 levels. So, my sense is that Bank of Baroda from the PSU banking space can perform and it is moving towards the life highs. The life highs was Rs 230 and after Indian Bank, this is the only PSU bank which is now very close to the life highs. So, that gives a lot of boost to the strength which is coming into the stock price."