BankNifty Low-Risk High Reward Option Strategy for Direction Movement

Hey, I hope you are doing well. Through this blog, I try to share a few options strategies that we can use to generate monthly cheques from options trading. In today’s post, I’m sharing BankNifty Low-Risk High Reward Option Strategy for the directional movement.

In this post, first, we will discuss why I choose the directional strategy in Banknifty and then I will share the strategy and the adjustments that you can do in case BankNifty reverses from here.

This strategy and all the strategies I’m sharing on this blog are part of our Option Strategies: A Mentorship Program.

If you’re an options trader looking to take your skills to the next level, then our Options Strategies: A Mentorship Program is the perfect opportunity for you. With our program, you’ll learn advanced option hedging strategies and adjustments through live market support, giving you the hands-on experience you need to succeed.

By signing up for our program, you’ll gain access to a team of experienced options traders who will guide you every step of the way. You’ll learn how to identify the right options strategies for different market conditions, how to manage risk effectively, and how to adjust your positions as needed.

Plus, with our live market support, you’ll have the opportunity to ask questions and get real-time feedback on your trades. This personalized support will help you develop the confidence and skills you need to take on even the most challenging market conditions.

Don’t miss out on this valuable opportunity to take your options trading to the next level. Sign up for our Options Strategies: A Mentorship Program today and start your journey towards success!

Now, let’s move to our BankNifty Low-Risk High Reward Option Strategy for Direction Movement.

BankNifty Low-Risk High Reward Option Strategy

As I have mentioned above that it’s a directional strategy. So first step to find the direction of the asset. And to find the direction, techinal analysis will help. So let’s look at the chart of Banknifty first.

If you follow me on social media, then you would know that I have shared many times that 39500 – 39600 is the zone that is acting as the immediate support zone. And BankNifty has bounced back 2 times exactly from this zone.

But you can see on the chart that, this time banknifty has given a breakdown from this zone with rising volumes that indicates that BankNifty is trying to sustain below this zone. This triggered a short trade.

Even on the current candle, the high(39591) is almost the same as the zone. So it confirms that banknifty looks weak and heading towards the downside target of 38200. Current levels are the perfect entry to take a trade because it is trading near to resistance zone i.e. 39500 – 39600. So risk:reward ratio is very high.

Now, that we knew that directions are bearish, we can create a bearish strategy here while keeping stoploss above this zone.

BankNifty Low-Risk High Reward Option Strategy

We have many directional strategies for a bearish trend like bear put spread or bear call spread but my favorite strategy is the collar strategy. I have optimized it in such a way that if I’m wrong, I lose low but if I’m right, I will make big.

• I’m sharing this optimized strategy with my Mentorship Students. Click here to enroll: Option Strategies: A Mentorship Program

This optimized strategy is alone enough to make decent money month after month while taking a nominal loss. The only catch is: you should know how to find the right direction.

In this above strategy, you can see that risk is just ₹4000 and the reward is ₹12000 with just one lot. Risk:reward ratio is 1:3.

Possible adjustments for this strategy:

Because the risk is very low so you don’t need to bother about loss. You can keep a stop loss around 40000. This means if you find that banknifty reverse from here, you can just book your profit in shorted PUT and shift it to a higher level. By doing this, you will receive more premiums and your overall risk will be zero.

So it can be a zero-loss banknifty option strategy.

I hope these strategies are helping to generate some cash flow from options strategies. If you have any query related to this BankNifty Low-Risk High Reward Option Strategy, please type in the comment box.

If you’re an options trader looking to take your skills to the next level, then our Options Strategies: A Mentorship Program is the perfect opportunity for you. With our program, you’ll learn advanced option hedging strategies and adjustments through live market support, giving you the hands-on experience you need to succeed.

By signing up for our program, you’ll gain access to a team of experienced options traders who will guide you every step of the way. You’ll learn how to identify the right options strategies for different market conditions, how to manage risk effectively, and how to adjust your positions as needed.

Plus, with our live market support, you’ll have the opportunity to ask questions and get real-time feedback on your trades. This personalized support will help you develop the confidence and skills you need to take on even the most challenging market conditions.

Don’t miss out on this valuable opportunity to take your options trading to the next level. Sign up for our Options Strategies: A Mentorship Program today and start your journey towards success!

Here is the link: Option Strategies: A Mentorship Program

DISCLAIMER: – we are not SEBI research analysts. Views and strategies are 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 for interpreting specified analysis methods.  This information should only be used by investors and traders who are aware of the risk inherent in securities trading.