Derivative strategy for Bank Nifty from Motilal Oswal Securities

Mentioned below is the derivative strategy for Bank Nifty from Motilal Oswal Securities:

OPTION STRATEGY: BANKNIFTY (Modified Put Butterfly Spread)
Buy 16,500 May PE 1 Lot                 
Sell 16,000 May PE 2 Lots                
Buy 15,700 May PE 1 lot
Target: 11,500                    
Stop Loss: 3,500

Rationale:

1. Option indicative band of Bank Nifty suggests range of 16,000-17,000

2. Unwinding in 16,500 PE would trigger downside momentum

3. Considering proximity to expiry and to benefit from theta decay, Low risk Modified Put Butterfly Spread is  recommended

Disclaimer: Motilal Oswal Securities ( MOSL ) is regulated by the Securities and Exchange Board of India ("SEBI") and is licensed to carry on the business of broking, depository services and related activities.Motilal Oswal Securities Limited is registered under SEBI (Research Analysts) Regulation 2014 SEBI Registration No :-INH000000412. MOSL or its associate might be involved in market making for the subject company or have potential conflict of interest.

Shubham Agarwal is a head of Quantitative Research, Motilal Oswal Securities