Here's how to trade Nifty today: Expert strategy for sideways market

With a likely trading Nifty range of 23,700-24,700 in the coming week, a Short Strangle strategy could be an effective way to capitalise on expected consolidation

Recommended Strategy:

• Strategy: Nifty Short Strangle
• Expiry: 8-May-2025
• Strike Prices: Sell 23500 Put @13 and Sell 24900 Call @9
• Net Premium Inflow: 22 points
• Stop Loss: 44
• Target: Entire Premium Inflow

Rationale:

• The consolidative setup in most of the broader market stocks is inkling a muted underlying environment.
• Also, on Nifty the 24,550 zone aligning with the 61.8 per cent Fibonacci resistance and the presence of an intermediate high near 24,800—suggest possible supply barriers.
• On the lower side, 23,800 now act as key support on a role-reversal basis.
• Strategy view: With a likely trading range of 23,700–24,700 in the coming week, a Short Strangle strategy could be an effective way to capitalise on expected consolidation.
• This strategy is profitable if the market remains in a tight range, benefiting from both volatility contraction and Theta decay.

(This article is by Sahaj Agrawal, senior vice president, head of derivatives Research, Kotak Securities. Views expressed are his own.)