Feb 19, 2023
Nifty may remain volatile, use Call Ladder strategy for profits on F&O expiry; Bank Nifty support at 36000
By Rajesh Palviya
In Nifty current series a Long Unwinding has been witnessed with decrease in price of (-)2.18% and decrease in OI by (-)31% as of Wednesday, wherein there was unwinding of 37.79.06 lakh shares in OI, decreasing from 122.67 lakh to 84.88 lakh shares. NSE Nifty 50 current month rollover stands at 23% as of Wednesday, while Nifty Put Call Ratio, a sentiment indicator used by Traders to gauge the market sentiment and mood, is currently at 0.83 compared to 0.97 of last week, indicating flat-to-positive movement.
In weekly options there was Call writing seen at 17,200 strike followed by 17,300 & 17,500 while on the Put side noticeable activity of writing was witnessed in 17,000 ,16,800 & 16,700 strike prices. Options data suggest an immediate trading range between 17,000 and 17,300 levels.
Nifty Open Interest Concentration
Nifty Option OI Change
Bank Nifty Outlook
In current series there has been a Long Unwinding witnessed in Bank Nifty Fut with an decrease in price of (-)0.36% and decrease in OI by (-)42% as of Wednesday, wherein there was unwinding of 15.53 lakh shares in OI, decreasing from 37.06 lakh to 21.53 lakh shares. Bank Nifty Current series rollover stands at 20% as of Wednesday, while Bank Nifty Put Call Ratio, a sentiment indicator used by traders to gauge the market sentiment and mood, is currently at 0.63 compared to 0.80 of last week indicating flat-to-positive movement.
Bank Nifty Put options OI distribution shows that 36,000 has highest OI concentration followed by 35,500 & 35,800 which may act as support for current expiry and on the Call front 37,000 followed by 36,500 & 36,800 witnessed significant OI concentration and may act as resistance.
In weekly options Call writing seen at 36,500, 36,800 & 37,000 strike while on the put side it was seen at 36,000, 35,500 & 35,800 Options data indicated an immediate trading range between 37,000 and 36,000 levels.
Bank Nifty Open Interest Concentration
Bank Nifty Option OI Change
NSE Nifty 50 trading strategy for F&O expiry day
The strategy which we are suggesting for this monthly expiry dated 28th April is a Moderately Bullish strategy called as CALL LADDER, which involves buying of one lot of Nifty 17,150 Call @ 180 & selling of one lot each of 17,300 Call @ 106 & one lot of 17,450 Call @ 57. The cost of the strategy involves outflow of Rs 850 which is the maximum loss if Nifty trades and remains below 17,160 levels on expiry day.The maximum profit of Rs 6,650 will be attained at 17,300 levels, while strategy will start making loss above 17,580, hence it’s advisable to exit the strategy in total to avoid unlimited losses above 17,580. Break Even points of the strategy are 17,583 on upside and 17,167 on the lower side.
(Rajesh Palviya, VP – Research (Head Technical & Derivatives), Axis Securities. Views expressed are the author’s own.)
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