Tuesday, 31 January 2017

Budget-2017 Option Strategy

Hello Friends...!!!

This is my first Blog on this platform. I have been in market since last 10 years. My key skills involve Equity Trading with the help of Derivatives & Technical. Devising various Options Strategies with multiple combinations.

Here is the Option Strategy which can be executed to  play this Budget 2017 event.

View: I feel markets are overwhelmed in terms of price action. Looking at the INDIAVIX average this week is at around 17 levels in comparison to previous year's one week before the budget was at around 23 levels. Indicating that no major volatility is likely in this event hence the Range Bound View emerges.

After a strong run up from the December16 low of 7894 till 8670 ( around 775 points), chances of major rally is not visible & a consolidation in the range of 8300-8900 may be seen in this February Expiry.

Action: Sell 8300 Feb Put@50 ; Sell 8900 Feb Call@35; Equal qty.

Total Premium Inflow: 85
Upper Break Even Point: 8985
Lower Break Even Point: 8215
Profit Range: 8215-8985
Max Reward: 85
Risk: Unlimited below or above the Break even points.

Traders can keep Stop Loss of 200 on overall premiums or to  play till expiry once can also keep stop loss on Nifty i.e. if it goes below 8215 or goes above 8985 then cut the positions.

It could be high probability trade as crossing the bigger range of 8215-8985 in this series is very low.

Note: Break even points are the levels from where profit or loss starts.

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