Hello Friend, As you know the budget session is about to start on February 1st, 2022. In today’s article, I’m sharing a Nifty option strategy for budget session.
Before we go further, Let me share some important points that we need to keep in mind before taking any trade in the event like budget session.
This type of event will be highly volatile. You may get sharp movement in either direction. So the first thing we need to do is: Keep your risk Limited. Choose a strategy that has limited risk on both sides.
The second step is, Choose a strategy that you can manage well. This means all the adjustments or trading plans should be ready before entre in that particular strategy.
Remember one thing: Profit will not come which strategy you are deploying. Profit will only come, How well you manage your trade.– Sachin Sival
So your trading plan Or Adjustment should be ready for every situation you may face in the coming sessions.
I’m a limited
Nifty range analysis for strategy selection
Before going further, let us look at the chart. You can see 17000 – 16700 is a strong support zone. On 28th January 2022. Nifty tried to break this zone but Couldn’t sustain below.
The next support zone is around 16410 – 15950 which is a crucial level in terms of short to medium-term trends. On the upside 17950 – 18250 is the strong resistance zone. Nifty needs to sustain above this zone for further upside levels.
So here we have a wide range of 16400 – 18200 and based on this range we’ll deploy a strategy.
Open Interest analysis for Nifty option strategy
Based on the 3rd February expiry option chain data, the highest Open interest stands at 18000 CE & 16000 PE, followed by 17200 CE & 16500 PE. PCR of all strikes is 0.80, which indicates a neutral market. PCR at 16500 stands at 10+ which is acting as an immediate support level.
The Put-call ratio at 18000 stands at 0.06, which is acting as a resistance level. Based on Option chain data, 17000, 16500 are good support levels and 17500 & 18000 are good resistance levels for this expiry.
Nifty Option Strategy for Budget Session
I’m deploying calendar spread, Keeping theta and Vega long. You can see our breakeven are 16597 & 18487. We will lose money beyond this range. Here I’m not suggesting any adjustments just keep these levels as a stop-loss.
If you want to learn these strategies and their adjustments in more practical ways with live mentorship, You can enroll in our Option Strategies – A Mentorship Program.
Much Check this also–
- The Collar Option Strategy – An In-Depth Guide [+ Examples],
- High probability CATIC options strategy in BHARTIARTL,
- High probability Reverse Jade Lizard option strategy in ITC
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*( Please avoid any question related to which Call or Put we should buy in the coming week).
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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.