Nifty F&O: Apply Short Strangle amid improving breadth, says Sahaj Agrawal

Nifty Today: The immediate Support and Resistance levels for Nifty are: 22,900 and 23,700, respectively, as per Nifty 50 chart

Nifty Strategy: Short Strangle (6FEB2025 Series)

 

Strategy Details:

Sell 23800 CE and Sell 22800 PE

Inflow: Rs 23

Stop Loss: Rs 44

Target: Entire Premium Inflow 

Rationale: 

>> The immediate Support and Resistance levels for Nifty are: 22,900 and 23,700, respectively. 

>> There is an improvement in the overall market breadth over the last week, inkling a possible subtle shift in undertone towards some stability. 

>> Markets are expected to consolidate and trade sideways within the mentioned support and resistance levels. 

>> In this environment, a Short Strangle strategy is attractive to capitalise on Time (Theta) decay. This strategy offers the potential for profits if the market remains range-bound along with a contraction in Volatility and Theta decay.

 

   

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Disclaimer: Sahaj Agrawal is Senior Vice President, Head of Derivatives Research at Kotak Securities. Views expressed are his own.