 "markets, stocks, stock call, buy, sell, trading ideas, buy sell ideas")
Derivative Strategy
BEAR SPREAD Strategy on BANK NIFTY
Buy BANK NIFTY (14-Feb Expiry) 45000 PUT at Rs 380 & simultaneously sell 44500 PUT at Rs 200.75
Lot Size 15
Cost of the strategy Rs 179.25 (Rs 2,689 per strategy)
Also Read
Maximum profit Rs 4,811; If BANK NIFTY closes at or below 44500 on 14-Feb expiry.
Breakeven Point 44,820
Risk Reward Ratio 1:1.79
Approx margin required Rs 13,500
Rationale:
-
Short build up is seen in the BANK NIFTY Futures, where Open Interest rose by 7 per cent with Bank Nifty falling by 1.76 per cent.
-
Short term trend of the Bank Nifty is weak as it has placed below its 5,11 and 20-day EMA.
-
Bank Nifty is on verge of breaking down from the upward sloping trendline, adjoining the lows of 26-Oct and 24-January 2024.
- Amongst the BANK NIFTY weekly options, Call writing is seen at 45000-45500 levels.
Note: It is advisable to book profit in the strategy when ROI exceeds 20%.
Disclaimer: Nandish Shah is Sr. Derivatives & Technical Research Analyst at HDFC Securities. He doesn't hold any position in the stock. Views are personal.
