Hope you all are doing good in your trading. In the previous time, Fund managers want to hedge the risk of their portfolios that are the reason options were introduced. Options are all about hedging and you can generate your consistent return if you trade them correctly. that’s the reason we started this weekly analysis report to share some good hedging strategies, which can help you to generate some consistent return with proper risk management.
Last week we shared some strategies in Nifty and BankNifty, which are giving some decent return of around 10%.
Let’s start with NIFTY IDX:10,791.65
Now Nifty is facing some resistance around 10800 levels which is also a 144 DMA level. On the upper side, 10900 will act as a strong resistance level which needs to break for more upside levels. 10700-10900 is the trading range for this week. This week monthly expiry is also there and volatility is also on little higher side. So As I always say Keep your risk management on the higher side.
According to open interest data, Highest Open Interest stands at 11000 CE & 10700 PE followed by 10900 CE & 10400 PE. PCR is 1.08 which is a Neutral zone. If we are looking at individual strike PCR, PCR at 10900 is 0.30 and PCR at 10700 is 2.75. So this is the range(10900-10700) we are expecting this week. For PCR you can refer to our previous post.
Weekly Option Strategies:
This week m sharing two strategies. One is for those who don’t know much about option strategies, can create IRON BUTTERFLY and those who can track Can initiate CALL RATIO SPREAD
2. CALL RATIO SPREAD
BANKNIFTY IDX: 26,867.55
According to option chain, Highest open interest stands at 27000 CE 7 26500 PE followed by 27300 CE & 26800 PE. PCR stands at 1.02, in a neutral zone. According to individual strike PCR data, PCE at 27000 is 0.70 which is not strong resistance, PCR needs to be below 0.60 to make it strong resistance. on the other hand, PCR at 26700 is 7.29 which is a very strong support level. so we can keep 26700 as a stop loss for this expiry as per current data. As per data, a neural strategy will be good here, either it should be BUTTERFLY or CALL RATIO SPREAD.
Weekly Strategy: CALL RATIO SPREAD
Post your comments in the comment box if you have a query related to these options strategies. You can ask any question related to options trading in the comment box.
If you need More real-time assistance on these strategies, Can open a trading account with us and you will get real-time assistance on every month on these hedging strategies.
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.