Here's derivative strategy on Nifty Bank by Nandish Shah of HDFC Securities

Long build-up is seen in the Bank Nifty futures during the series till now, where we have seen 35 per cent (Prov) rise in the open interest with it rising by 2.71 per cent

Derivative strategy

Bull Spread Strategy on BANK NIFTY

1) Buy BANKNIFTY (27-March Expiry) 50000 CALL at Rs 323 simultaneously sell 50500 CALL at Rs 160

• Lot size 30
• Cost of the strategy Rs 163 (Rs 4,890 per strategy)
• Maximum profit Rs 7,110 If BANK NIFTY closes at or above 50,500 on 27 March expiry.
• Breakeven Point Rs 50,263
• Risk Reward Ratio 1: 1.45
• Approx margin required Rs 30,000

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Rationale:

• Long build-up is seen in the Nifty Bank futures during the series till now, where we have seen 35 per cent (Prov) rise in the open interest with it rising by 2.71 per cent.
• Primary trend turned positive as Nifty Bank has crossed its 200 day EMA.
• Index has broken out from the downward sloping trendline on the daily and weekly charts.
• Aggressive Put writing is seen at 49,500-50,000 levels, suggesting limited downside from hereon.

ALSO READ | Stock Market LIVE Updates: GIFT Nifty shows slight upside at open for India mkts; Asia Pacific mixed  (Disclaimer: This article is by Nandish Shah, senior technical/derivative analyst at HDFC Securities. Views expressed are his own.)