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Nifty Strategy: Short Strangle (6FEB2025 Series)
Strategy Details:
Sell 23800 CE and Sell 22800 PE
Inflow: Rs 23
Stop Loss: Rs 44
Target: Entire Premium Inflow
Rationale:
>> The immediate Support and Resistance levels for Nifty are: 22,900 and 23,700, respectively.
>> There is an improvement in the overall market breadth over the last week, inkling a possible subtle shift in undertone towards some stability.
>> Markets are expected to consolidate and trade sideways within the mentioned support and resistance levels.
>> In this environment, a Short Strangle strategy is attractive to capitalise on Time (Theta) decay. This strategy offers the potential for profits if the market remains range-bound along with a contraction in Volatility and Theta decay.
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Disclaimer: Sahaj Agrawal is Senior Vice President, Head of Derivatives Research at Kotak Securities. Views expressed are his own.
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