Glenmark Pharmaceuticals is one of the leading companies in the Indian pharma sector, with a presence in over 80 countries. The company recently announced its quarterly results for the period ending September 30, 2023, which showed a net loss of Rs. 2.01 billion due to exceptional legal costs.
However, the company also reported a growth in revenue and operating profit, driven by strong performance in the US, Europe, and India markets. How can investors use options trading to benefit from the company’s prospects and hedge against the risks?
In this blog post, we will explore the reverse jade lizard option strategy for Glenmark, which is a combination of a short put spread and a naked call.
We will also explain the rationale, payoff, and risk-reward profile of this strategy. Whether you are bullish, bearish, or neutral on Glenmark, you will find this option strategy interesting and useful.
Best Option Strategy in Glenmark
Before we deploy any strategy, first we need to understand the chart of that particular script. Same as in glenmark also:
After quaterfly result. we saw a sharp decline in the Glenmark pharma. If you looks at the chart, you will find that overall trend looks weak on the chart.
Based on the chart, 805.55 is acting as the immediate resistance level and trying to give a breakdown from immediate support level i.e. 730.
Now lets looks at the Open Interest data to confirm the trend.
By looking at the Open Interest chart, we can say that huge resistance buildup around 750 & 780.
Support is at 700 but you can see huge OI is available around Calls that indicates that people are selling huge calls compare to Puts and when people are selling Calls that mean? Share in the comment box.
Best Option Strategy in Glenmark
By looking at the chart and OI data, we can say that overall trend is down and Glenmark is trying to give a breakdown from it's important support level.
Reverse Jade Lizard is the best strategy for such setups. Let's have a look at the Best Option Strategy in Glenmark i.e. Reverse Jade Lizard option strategy.
Based on the range we find in Glenmark, we are selling 700 PE & 780 CE and managing downside risk; we are buying 690 PE. Now you can see that we don’t have any risk on downside risk. But we have unlimited risk on Upside.
So, to manage that risk you have to follow some adjustments if you find that Glenmark is approaching your sold 780 Call option.
Once you find that script is approaching your sold call strike means 780, you can buy 790 CE to lock your unlimited upside loss. You can bring your sold PUT to a higher level to collect some extra premium.
Now when do you have to make this adjustment? only if you find LT above 2260.
You can join our Options Strategies – A Mentorship program to learn some of these adjustments in a practical way.
I hope my articles are helping with your profitable trading. If you have any feedback or suggestions, please type in the comment box. Your feedback will help me to do something better in the future.
Please type your queries related to this Reverse Jade Lizard option strategy in the comment box. I will try to answer all your queries.
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DISCLAIMER: – we are not a SEBI research analyst. Views posted here only for educational purposes. There is no liability whatsoever for any loss arising from the use of this product or its contents. This product is not a recommendation to buy or sell, but rather a guideline to interpreting specified analysis methods. This information should only be used by investors and traders who are aware of the risk inherent in securities trading.