Bank Nifty: Nandish Shah of HDFC Sec recommends Bull Spread Strategy

Stock Market Today: Short-term trend in Bank Nifty has turned positive as the index is placed above its 5-day EMA

Bank Nifty share price today, March 7:

 

BULL SPREAD Strategy on BANK NIFTY

  Buy BANKNIFTY (27-March Expiry) 49000 CALL at Rs 590 & simultaneously sell 49500 CALL at Rs 380

  Lot Size: 30 

Cost of the strategy: Rs 210 (Rs 6,300 per strategy) 

Maximum profit: Rs 8,700 if BANK NIFTY closes at or above 49,500 on 27 March expiry.

  Breakeven Point: Rs 49,210 

Risk Reward Ratio: 1: 1.38 

Approx margin required: Rs 30,000

 

Rationale:

  >> Long build up has been seen in the Bank Nifty futures during the week till now, where we have seen 7 per cent (Prov) rise in the open interest, with the index closing 0.60 per cent higher on Thursday, March 6, 2025. 

 

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>> Short-term trend in Bank Nifty has turned positive as the index is placed above its 5-day EMA.  >> Bank Nifty has formed a strong base by forming multiple bottoms around 47,800 levels.

 

>> Bank Nifty open interest put call ratio rose to 1.02 levels from 0.91 levels on the back of Put writing at 48,000-48,500 levels, suggesting limited downside from hereon.  ALSO READ: Nifty Today: Sahaj Agarwal of Kotak Sec suggests 'Short Strangle' on index

 

  Note : It is advisable to book profit in the strategy when ROI exceeds 20%.  ====================  Disclaimer: This article is by Nandish Shah, senior technical/derivative analyst at HDFC Securities. Views expressed are his own.