Bull spread Strategy on Nifty
Buy Nifty (05-May Expiry) 17,300 CALL at Rs 133 & simultaneously sell 17,500 CALL at Rs 58
Lot Size 50
Cost of the strategy Rs 75 (Rs 3,750 per strategy)
Maximum profit Rs 6,250 If Nifty closes at or above 17,500 on 05 May expiry.
Breakeven Point Rs 17,375
Rationale:
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We have seen long rollover in the Nifty futures to the May series where we have seen 22 per cent addition (Prov) with Nifty rising by 1.20 per cent.
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The Nifty has formed higher top formation preceded by higher bottom, which indicates higher probability of markets extending the gains.
- The short term