Derivative strategy on Bank Nifty from Motilal Oswal Securities

Here is the derivative strategy Bank Nifty from Sacchitanand Uttekar:

Option Strategy :

BANK NIFTY: Modified Call butterfly Spread

Buy 20000 CE Oct 1 lot

Sell 20300 CE Oct 2 lots

Buy 24000 CE Oct 1 lot

Target: Rs 10000 (At 20300) , profit limited to Rs 6000 above 20400          

SL: 2000 below 20000                              

Rationale:

1. BANK NIFTY is in Long- Long Unwinding cycle

2. Option data suggests support shifting higher from 19000 to 19500

3. Call unwinding in 19500 & 20000 CE could lead to option trigger, boosting the momentum

4. Considering expiry week and to benefit from faster theta decay, Modified Call butterfly Spread is recommended
 
 
Disclaimer: Motilal Oswal Securities ( MOSL ) is regulated by the Securities and Exchange Board of India ("SEBI") and is licensed to carry on the business of broking, depository services and related activities. MOSL is in the process of getting registered under SEBI - Research Analyst Regulations. MOSL, the spokesperson or his relatives, do not have financial interest in the securities mentioned above. The spokesperson has not served as a director, employee or officer at the subject company in the last 12 months. MOSL or its associate might be involved in market making for the subject company or have potential conflict of interest.

Sacchitanand Uttekar is an Equity Technical Analyst at Motilal Oswal Securities