BankNifty Options Strategy for December 2024 Expiry | Profitable Options Trading

Options trading, a sophisticated financial instrument, offers traders the opportunity to profit from market fluctuations without taking direct ownership of underlying assets. However, success in this domain requires a well-defined strategy and a deep understanding of market dynamics.

As the December 2024 expiry approaches, the Bank Nifty index, a benchmark index representing the banking sector, presents a compelling opportunity for traders to capitalize on its potential volatility.

Leveraging the Power of BankNifty Options

The BankNifty index is a benchmark index representing the banking sector. It is well-known for its high volatility, which makes it an ideal candidate for options trading strategies.

With a well-structured approach, traders can significantly enhance their chances of achieving profitable outcomes. One strategy involves identifying key support and resistance levels, analyzing market trends, and implementing a disciplined risk management framework.

In this article, we will explore a proven options strategy tailored to the BankNifty index. By understanding the underlying principles and meticulously executing the strategy, traders can navigate the complex landscape of options trading and potentially reap substantial rewards.

BankNifty Options Strategy for December 2024 Expiry

Before we examine the option strategy in depth, we need to analyse the overall trend and important levels of BankNifty.

Based on the chart. The overall trend looks Bullish. BankNifty is trading above its monthly VWAP.

Now the recent all-time high i.e. 54467.35 is acting as the immediate resistance and the 52500 level is acting as the immediate support level.

We may expect this range until BankNifty is giving a fresh breakout from this level.

Now when the overall trend is UP, we can not neglect a possible breakout from 54467. So if we are creating a strategy in BankNifty, we should also consider this situation.

Now, let's look at the Open interest data for the confirmation of the above-shared levels:

Open Interest also indicates that the first resistance is at 54000 having PCR at 0.40. The second resistance is at 24500 with PCR at 0.1.

On the downside, 52500 is acting as the immediate support having the PCR at 2.6.

• If you don't know how to calculate support and resistance with PCR, you can read this article: Calculate Support and Resistance through PCR

By following these levels we can create a range-bound strategy.

BankNifty Options Strategy for December 2024 Expiry

Below is the BankNifty option strategy based on the levels, mentioned above.

I'm keeping a low risk and a narrow range for this strategy. Because I will make some adjustments if BankNifty goes beyond my analysis.

Adjustments for BankNifty Option Strategy

I prefer to keep my trading setup very simple. So as my adjustments too.

I will shift my call spread to lower levels if I find BankNifty is breaching my lower breakeven and If BankNifty breach my upper breakeven, I will shift my Put spread.

I will also make some more adjustments like squaring off the Call Spread or PUT Spread completely and convert it into a directional strategy based on further price movement.

The idea is to reduce the spread and convert it into a no-loss option strategy.

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Below are some of the options strategies that we have shared in the premium channel for December expiry.

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Disclaimer: This analysis is purely for informational purposes and does not constitute investment advice. Trading involves risk, and you should always conduct your own research and consult with a financial advisor before making any investment decisions.