Sell call options at 5200-5300 levels: Mitesh Thacker

In a chat with ET Now, Mitesh Thacker, Technical Analyst, miteshthacker.com gives his overview on markets.

ET Now: What do you do on the Nifty now? Would you start taking some call option, buying some puts or selling some calls in a bid to be defensive or even make a trade for the downside?

Mitesh Thacker: Not really make a trade for the downside very clearly because it still have not got any signal on intraday charts. But on the Nifty, selling calls would not be a bad idea. We have had a fantastic rally. We are now hitting very close to important supply points. If we are holding long positions, against that we should look at selling call options, particularly the 5200 or the 5300 strike. That would make some sense and 5098, which is today’s low could be the stop loss. Let's say if somebody has got a futures position and he sells call option.

So, if the futures get to a stop loss at 5098, a good part of that decline or the loss would be covered by the sell position on the call side, so that would, also work at the hedge plus also make sure that you actually get the strike plus the premium as the existing case market continues to rally, which I do not think will happen but strange things can happen in markets.