Bank Nifty Option strategy for Budget Session

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Hello Friend, As we know that Budget Session is starting from July 5th, so what should be your Bank Nifty Option strategy for budget session?

Let’s Look at the Bank Nifty Chart first:

Bank Nifty Chart:

Bank Nifty Chart

  • If we look at the Bank Nifty Chart, We can see that Bank Nifty is trading in a range of 1700 points from last couple of week.
  • 31400-31700 is strong resistance one & 30400-30000 is a strong support zone. Breakout or breakdown from these levels will only lead to further levels.
  • If we get a breakdown from 30000 then next support level is 29800-29400. So there level should be consider as Important level.
  • We should not forget about the GAP at 30072-29480, BankNifty would try to fill this GAP before starting a new Upside rally.

Bank Nifty Option Chain

  • Based on Bank Nifty option chain data(July, 11), the highest open interest stands at 32000 CE & 30000 PE followed by 32500 CE & 31000 PE. PCR of all strikes stands at 0.75 which is a neutral zone. PCR at 31000 stands at 3.91, which is acting an immediate support zone. PCR at 31500 stands at 0.22 which is acting as an immediate resistance zone. Option pain stands at 31300, giving us expiry level. Keep tracking this option pain levels. Shift in option pain will give us new level for expiry.
  • We can see that Range if very wide and this is because of Highly volatile event. So any unlimited loss strategy not advisable.

Bank Nifty Option Strategy for budget session: Calendar spread

Bank Nifty Option Strategy for budget session

We are going with Calendar spread strategy, reason we want to keep our Vega & theta Long and taking 25th July Expiry for hedge instead of 18th July expiry. High liquidity and low theta decay are the Reasons to take 25th July expiry. Strategy need to square off on 11th July. Basically it’s a weekly option strategy.

Possible adjustments :

If we get a breakdown from 30768, then Book profit in Call Spread and shift 300 point below from this level, means new position will be Sell 31000 CE 11th July Expiry &  buy 31000 CE 25th July expiry. Same we have to do with PUT Spread after a breakout from 32000.

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DISCLAIMER: – we are not a SEBI research analyst. Views posted here only for educational purposes. There is no liability whatsoever for any loss arising from the use of this product or its contents. This product is not a recommendation to buy or sell, but rather a guideline to interpreting specified analysis methods.  This information should only be used by investors and traders who are aware of the risk inherent in securities trading.

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Sachin Sival is the founder and CEO of Replete Equities, an options trading company that specializes in delta hedging. A self-taught trader, Sachin has a passion for volatility trading and stock trading. Sachin loves to hone his skills by reading up on new strategies and techniques as well as taking part in industry events. In addition to being a successful entrepreneur, Sachin also takes pleasure in photography - as a hobby.

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