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Buy BANK NIFTY (expiration Oct 09) 51,800 PUT at Rs 284 and simultaneously sell 51,300 PUT at Rs 160
Lot size 15
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Strategy cost Rs 124 (Rs 1,860 per strategy)
Maximum Profit Rs 5,640 If Bank Nifty closes at Rs 51,300 or below on October 9 expiry.
Breakeven point Rs 51676
Risk/reward ratio 1:3.03
Approximate margin required Rs 15,600
Reasoning:
An accumulation of short positions is seen in the Bank Nifty Futures, where we saw open interest increase by 29 percent, while Bank Nifty fell by 2.04 percent.
The Bank Nifty’s short-term trend has weakened as it is placed below its 5, 11 and 20 day EMA.
The RSI oscillators are in bearish mode and placed below 50 on the daily chart, indicating a bearish trend.
Among Bank NIFTY options, call selling is seen at 52,000 to 52,500 levels.
(Nandish Shah is a Technical Research Analyst at HDFC Securities. Views expressed are his own.)
First publication: October 4, 2024 | 7:23 a.m. STI