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Nifty Strategy: Short Strangle (13FEB2025 series)
Strategy Details:
Expiry: 13FEB2025
Strikes: Sell 22800PE and Sell 24000CE
Net Inflow: 18
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Stop Loss: 36
Target: Entire Premium Inflow
Rationale:
>> There is an improvement in the overall market breadth over the last week, suggesting a limited downside capped within 22900. On the higher side, 23800 remains crucial and might take some time before it is breached.
>> Given this setup, the market is likely to consolidate within this range, making a Short Strangle strategy an ideal choice to capitalize on time decay (Theta decay).
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>> This strategy offers the potential for profits if the market remains range-bound along with a contraction in Volatility and Theta decay.
Disclaimer: Sahaj Agrawal is Senior Vice President, Head of Derivatives Research at Kotak Securities. Views expressed are his own.

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