Bank Nifty Trading Strategy Today: Indian stock market indices touched record high levels on Wednesday, with the BSE Sensex surpassing 85,000 level and the Nifty 50 closing above the 26,000-mark. The rally in the domestic equity has been accelerated by improved investors’ risk appetite after the US Federal Reserve’s supersized interest rate cut, sustained foreign fund inflows and robust macro indicators.
Bank Nifty index gained 133.05 points, or 0.25%, to close at 54,101.65 on Wednesday and formed a bullish candlestick pattern on the daily charts.
Rahul Ghose, CEO of Hedged.in noted that the Bank Nifty Index is unable to sustain above 54,100 levels and is showing signs of a sideways move for the next few days. Wednesday’s high of 54,141 is acting as an immediate resistance, he said.
With this, Ghose suggests a low-risk Bank Nifty options strategy which makes money if the Bank Nifty falls below 53,200 by the end of 9 October weekly expiry.
“Even if the Bank Nifty does move up, the max risk in the trade is ₹1,000 only,” Ghose said.
Here is Bank Nifty options trading strategy for today by Rahul Ghose:
Modified Bearish Butterfly
Trade Structure:
> Buy 1 lot of the 09th Oct expiry 53500 PE at CMP 289
> Buy 1 lot of the 09th Oct expiry 53100 PE at CMP 184
> Sell 2 lots of the 09th Oct expiry 53200 PE at CMP 204
Trade Rules:
The capital required in the trade is ₹39,700. This trade can be entered today if Bank Nifty is trading between the levels of 53,800 and 54,300. The maximum loss in the trade is ₹1,000 and one can look to exit with a profit of above 1,500 per set, Ghose said.
Trade Modifications:
The trade is protected with a limited risk of ₹1,000 per set. However, if Bank Nifty goes above 54,600 levels, the sold Put option can be brought higher by 100 to 200 points, to get more credit, making the trade safe, Ghose added.
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