BankNifty Strategy August 2019

With PMO showing interest to intervene in the market sell offs and FPI concerns and China giving hints to discuss with US to ease the tariff war; market may get some relief rally in coming times. Even if market doesnt rally immediately it will take a pause and sell off may stop. Those who feel market will trade above 27300 can create below spread for 2.75L cost. Refer the payoff graph and see if it helps you.

+1x 29AUG2019 27500CE - ₹ 1079.3
+1x 08AUG2019 28200PE - ₹ 245.05
-3x 08AUG2019 27400PE - ₹ 69.15
-2x 08AUG2019 29000CE - ₹ 52
Max. Profit ₹ +13,079.98
Max. Loss ₹ Undefined After BEP
Breakeven 27289.0-29615.0
Estimated Margin₹ +248,537

Adjustment: If market falls and trades below 28000 then keep shifting down the short calls for weekly expiry. In case of a flat expiry, you can repeat the weekly option positions with minor movement of strikes for the whole month and make a decent money. Downside is protected upto 27300.
Comment: Standard adjustment strategy for above short weekly positions if put goes into loss due to market fall, try to compensate the premium by selling calls of equal premium. Similarly if market moves up and short call hurts you then sell equal premium puts for coverage. However in the above strategy if market moves up, it wont hurt as you have long CE. Near upper BEP you need to do adjustments.
Comment: Disclaimer: Objective of this posts is to educate and help members earn profit from trading. I am not a SEBI registered analyst and strongly recommend people not to trade in NSE/BSE/MCX market basis above recommendations. All the stock ideas/views are momentum picks chosen using technical indicators and for education purpose only. And my views may go wrong. I am not responsible for profit and losses or SEBI audits arising out of the above calls. Stock market trading and investment is subject to market risks. Contact your financial advisor before taking trades or trade at your own risk.

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