Weekly Strategy, October Week 4 | Stocks and Commodities

P R Sundar, Aditya Trading Solutions

Weekly Strategy: Sell Nify 5900 Put option and 6500 Call option

1. Our markets are trading near many resistances and there are only 9 more trading sessions for this expiry.
2. Also there is huge selling pressure from DII side.
3. So our market will face lot of resistance going forward and there not many important results during the week.
4. So in our opinion Nifty may go up to a maximum of 6400.
5. Since the FII buying is so huge and global sentiments are good, the down side will also be limited.
6. Nifty will have good support at 6000.
7. So we suggest selling 5900 Put option and 6500 call option.
8. On Friday 5900 Put closed at Rs 12.30 and 6500 closed at Rs 4.85.
9. Since the market is expected to trade between 5900 and 6500, these two options are expected to expire worthless.
10. This is a low risk and low reward strategy.
11. In case if Nifty falls below 5980, then cut the 5900 Put and shift to 5850 or 5800 Put option.
12. Same thing if Nifty crosses 6420, then cut 6500 Call option and sell 6550 or 6600 Call option.
13. Between the srike price and trading price there should not be a difference of less than 80 points.

Follow Up:

1. October week 3 suggestion of selling December expiry 5000 Put option and 7000 Call option simultaneously for a combined premium of Rs 48, now trading for a combined premium of Rs 30.70.
2. October week 2 suggestion of selling December expiry 4500 Put option for a premium of Rs 25, now trading at Rs 8.50.
3. September week 4 suggestion of selling December expiry 5000 Put option and 7000 Call option simultaneously for a combined premium of Rs 76, now trading for a combined premium of Rs 30.70.