Bank Nifty Trading Strategy Today: The Indian stock market indices, Sensex and Nifty 50, are expected to continue witnessing selling pressure on Monday tracking weak global markets cues.
On Friday, Bank Nifty index crashed 896.20 points, or 1.74%, to close at 50,576.85, and formed a long bearish candle on the weekly chart.
Rahul Ghose, CEO of Hedged.in noted that Bank Nifty has broken its immediate support at the 51,000 level, indicating bearishness in the index. According to him, the ADX shows clear signs of momentum picking on the downside in the index after Friday’s fall in Bank Nifty.
With the view being downside, Ghose suggests a low-risk Bank Nifty Options strategy from hedged.in which makes money if the Bank Nifty moves down by the end of September’s expiry.
“The best part of this trading strategy is that, even if the Bank Nifty does move upside, the sold put can be brought upside to protect the debit in the bought put, making the trade safe. The risk in the trade is ₹1,800 only, with the technical view favoring the downside, the trade has a fair chance to end in profits,” Ghose said.
Here’s Bank Nifty Options Trading Strategy for today by Rahul Ghose:
> Buy 1 lot of the 25th Sept expiry 50000 PE at CMP
> Sell 1 lot of the 25th Sept expiry 49500 PE at CMP
The capital required in the trade is ₹19,000. This trade can be entered if Bank Nifty is trading between the levels of 50,400 and 50,600. The maximum loss in the trade is ₹1,800 and a good potential for profits on the downside, Ghose said.
The trade is protected with a limited risk of ₹1,800 per set. If Bank Nifty moves above 51,400 levels, the sold legs 49500 PE can be brought up by 100-300 points increasing the credit, to make the trade safer, Ghose added.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
