Bank Nifty Option strategy for Budget Session

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Hello Friend, As we know that Budget Session is starting on 1st February 2022, so what should be your Bank Nifty Option strategy for the budget session?

Let’s Look at the Bank Nifty Chart first:

Bank Nifty Chart:

Bank Nifty Chart
  • If we look at the Bank Nifty Chart, We can see that Bank Nifty is trading in a range of 2000 points from last couple of week.
  • 39000-39700 is strong resistance one & 36700-36200 is a strong support zone. Breakout or breakdown from these levels will only lead to further levels.
  • If we get a breakdown from 36200 then next support level is 34800-34400. So there level should be consider as Important level.
  • Breakout from 39700 will lead to 41000. So keep these levels as refrence for the comming session.

Bank Nifty Option Chain

banknifty option chain analysis
  • Based on Bank Nifty option chain data(February, 03), the highest open interest stands at 40000 CE & 36000 PE followed by 39500 CE & 36500 PE. PCR of all strikes stands at 0.69 which is a neutral zone. PCR at 37000 stands at 5.26, which is acting an immediate support zone. PCR at 39000 stands at 0.07 which is acting as an immediate resistance zone. Option pain stands at 38000, giving us expiry level. Keep tracking this option pain levels. Shift in option pain will give us new level for expiry.
  • We can see that Range if very wide and this is because of Highly volatile event. So any unlimited loss strategy not advisable.

Bank Nifty Option Strategy for budget session: Calendar spread

Bank Nifty Option Strategy for budget session

We are going with a Calendar spread strategy, the reason we want to keep our Vega & theta Long and taking 24th February Expiry for hedge instead of 10th February expiry. High liquidity and low theta decay are the Reasons to take the 24th February expiry. The strategy needs to square off on 10th February. Basically, it’s a weekly options strategy.

Possible adjustments :

If we get a breakdown from 36000, then Book profit in Call Spread and shift 300 points below from this level, which means the new position will be Sell 37700 CE 10th February Expiry &  buy 37800 CE 24th February expiry. Same we have to do with PUT Spread after a breakout from 40000.

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DISCLAIMER: – we are not a SEBI research analyst. Views posted here only for educational purposes. There is no liability whatsoever for any loss arising from the use of this product or its contents. This product is not a recommendation to buy or sell, but rather a guideline to interpreting specified analysis methods.  This information should only be used by investors and traders who are aware of the risk inherent in securities trading.

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Sachin Sival is the founder and CEO of Replete Equities, an options trading company that specializes in delta hedging. A self-taught trader, Sachin has a passion for volatility trading and stock trading. Sachin loves to hone his skills by reading up on new strategies and techniques as well as taking part in industry events.In addition to being a successful entrepreneur, Sachin also takes pleasure in photography - as a hobby.

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