Sahaj Agrawal of Kotak Securities suggests Short Strangle strategy on Nifty
Market is likely to remain range-bound in the near term, adhering to the key Support & Resistance levels established over the past two weeks
 "Sahaj Agrawal of Kotak Securities suggests Short Strangle strategy on Nifty")
Recommended Strategy:
Strategy: Nifty Short Strangle
Expiry: 27FEB 2025
Strike Prices: Sell 22,300 Put @ 16 and Sell 23,500 Call @ 14
Net Premium Inflow: 30 points
Stop Loss: 60 points
Also Read
Target: Entire Premium Inflow
Rationale
Market is likely to remain range-bound in the near term, adhering to the key Support & Resistance levels established over the past two weeks.
Key reference points for Nifty are: Support at 22,750 and Resistance at 23,450.
Given the current range-bound nature of the market, a Short Strangle strategy is an ideal choice to capitalize on time decay (Theta decay).
This strategy is profitable if the market remains in a tight range, benefiting from both volatility contraction and Theta decay.
(Disclaimer: Sahaj Agrawal is senior vice president and head of derivatives research at Kotak Securities. Views expressed are his own.)