Here's your Bank Nifty trading guide by Kotak Securities' Sahaj Agrawal

A Bull Call Spread is recommended to capture the anticipated rally while maintaining a defined risk-reward framework, says Sahaj Agrawal

Suggested Strategy:

• Strategy: Bank Nifty Bull Call Spread
• Expiry: May 29, 2025
• Strikes: Buy 55,500 CE and Sell 56,500 CE
• Net outflow: 350
• Stop loss: 100
• Strategy target: 800

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Rationale:

• Strong activity on Thursday, is a testimony of the strong sentimental undertone. Bank Nifty, which has been laggard so far, is now showing signs of strength.
• A breakout from the congestion in the form of a “Bullish Flag” is observed above 55,300 levels. Though the setup has the potential to propel Bank Nifty to much higher levels, a quick move up to 56,500 is expected over the next few days on an immediate basis.
• With volatility remaining on the higher side, a Bull Call Spread is recommended to capture the anticipated rally while maintaining a defined risk-reward framework.

F&O Setup: Here's how to trade Bank Nifty with a Bull Spread strategy 

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