Reliance - use a low risk short strangle to benefit from upside

Reliance has been correcting for a while, a short strangle strategy can be attempted to benefit from the reversal.

This is far safer in comparison with a naked long or short future positions.

Sell 1500 Put and 1560 Call between 25-30 Rs , each, try to manage a payout of 55-60 Rs . from both positions.

The position will give max. profit of Rs . 55-60 per unit, if Reliance trades between 1500-1560, and offer an opportunity to exit at par between 1445 and 1615 on expiry (Jan 30).

Still keep a stop loss of Rs . 75 payout, incase there is a wild move in prices, beyond the expected range.

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Remember to study the strategy thoroughly and carefully, preferably consult some financial consultant who understands options before taking a position based on this strategy or any position for that matter.

Trade closed: target reached