Expert Insights: Nandish Shah of HDFC Securities Recommends Potent ‘Bull Spread’ Strategy for Nifty
Derivative Strategy
BULL SPREAD Strategy on NIFTY
1) Trade Details:
- Buy Nifty (03-Oct Expiry) 26200 Call at Rs 140
- Sell 26500 Call at Rs 40
Investment and Returns:
- Lot Size: 25
- Cost of Strategy: Rs 100 (Rs 2,500 per strategy)
- Maximum Profit: Rs 5,000 if Nifty closes at or above Rs 26,500 on 03-Oct expiry
- Breakeven Point: Rs 26,300
- Risk-Reward Ratio: 1:2
- Margin Required: Approx. Rs 13,000
Rationale:
- Long rollover observed in Nifty Futures, with an increase in open interest and Nifty rising by 0.81%, closing at an all-time high.
- Short-term trend remains bullish, with Nifty above its 5, 11, and 20-day EMAs.
- Momentum indicators and oscillators are positive, and placed above 60 on the weekly chart, suggesting a bullish trend.
- Put writing is seen at 26000-26200 levels in NIFTY options, reinforcing bullish sentiment.
(Disclaimer: Nandish Shah is a senior technical/derivative analyst at HDFC Securities. Views expressed are his own.)
Original Story https://www.business-standard.com/markets/news/nandish-shah-of-hdfc-securities-suggests-bull-spread-strategy-on-nifty-124092700072_1.html
Category :
Tags:
