praveen.bhatiya

Nifty Option Strategy for Deep Consolidation Phase

NSE:NIFTY   Nifty 50 Index
Market seems to be in deep consolidation mode after the Budget presentation. Although PCR ( Put-Call Ratio ) of 1.1 suggests that uptrend is intact but this consolidation may continue till the end of this series. As we know that the nature of Volatility is to expand and to shrink and after the recent heightened activity sluggish phase is quite natural. Under this market situation trading the Index for intraday could be less rewarding and even it will eat the option premiums fast.
Calendar spread works well under these circumstances. Possible Net Calendar Spread would be like this: Buying the Feb Call and selling the March Call of Nifty both of same strike i.e. 9000). One can continue till Nifty remains below 8950 and book losses if it crosses this level.
Comment: Created Net Calendar Spread @ 71.10 Let's see how it moves.

Comments

Shouldn't it be Selling the Feb Call and Buying the March Call ?
Reply
@SatishBoda, It is Net Credit Calendar Spread in other words we are selling the Calendar Spread.
Reply
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