Nifty Option Strategy

Bear Spread (September Series)

Nifty Option Strategy: Bear Spread (September Series)

Markets witnessed sharp technical bounce back this week. We believe that this bounce back was primarily driven by short covering as technically it was trading in oversold zone. We believe that overall trend continue to remain bearish and Nifty will resume its downtrend from next week. Option data too suggests strong resistance at 5100/5200 levels. We recommend below strategy to play for downside from current levels Strategy Transactions View Initial cost/inflow Maximum Profit Profit When Loss When Bear Spread (September Series) Buy Nifty 5000 PE @ 121 Sell Nifty 4800 PE @ 62 Bearish INR 2,950 outflow per lot ( i.e. INR 59 * 50, 50 being lot size ) INR 7,050 ( i.e. INR 137 * 50, 50 being lot size ) If Nifty expires below 4900 If Nifty expires below 4941 Fix loss of Loss 59 points i.e. Rs. 2,950/lot if Nifty expires above 5000

** Beside above pay-off we may recommend to book profits before expiry if we spread narrow/increases depending on market condition

Price at Expiry
4500 4520 4550 4588 4650 4700 4800 4900 4941 5000 5050 5100 5212 5250 5280 5300

Strategy Payoff
141 141 141 141 141 141 141 41 0 -59 -59 -59 -59 -59 -59 -59

Strategy Payoff
200 150 100 50 0 4500 4520 4550 4588 4650 4700 4800 4900 4941 5000 5050 5100 5212 5250 5280 -50 -100 5300

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