Derivative strategy on Nifty by Motilal Oswal Securities

Option Strategy:

NIFTY : BEAR PUT SPREAD

Buy 9600 PE 1 lot

Sell 9500 PE 1 lot

Target: 4950                     

SL: 2550

Rationale:

1) Nifty failed to cross 9700

2) Fresh writing at 9600 & 9700 CE could drag the index to lower levels

3) Put unwinding in 9600 strike also suggest that bears are getting grip for a profit booking decline

4) Thus low risk / Hedge strategy Bear Put Spread is recommended

Disclaimer: Chandan Taparia is a Derivatives and Technical Analyst at Motilal Oswal Securities.