Derivative strategy on Nifty by Motilal Oswal Securities

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Option Strategy:

 

NIFTY:  BEAR PUT SPREAD

 

Buy 9600 PE 1 lot

Sell 9500 PE 1 lot

 

Rationale:

 

1. Nifty failed to cross 9700 and broken immediate support zone

2. It has been closing on negative note from last four sessions

3. Fresh writing at 9600 & 9700 CE could drag the index to lower levels

4. Put unwinding in 9600 strike also suggest that bears are getting grip for a profit booking decline

5. Thus low risk / Hedge strategy Bear Put Spread is recommended

 

Reward: 5250                    

Risk: 2250

 

: Chandan Taparia is a Derivatives and Technical Analyst at Motilal Oswal Securities.


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