Bank Nifty Trading Strategy Today: The Indian stock market indices, Sensex and Nifty 50 hit a life-time high on September 20 led by optimism over the supersized US Federal Reserve’s interest rate cut last week.
On Friday, the Sensex surged 1,359.51 points, or 1.63%, to close at 84,544.31, while the Nifty 50 settled 375.15 points, or 1.48%, higher at 25,790.95. The benchmark Nifty touched a record high level of 25,849.25, while the Sensex hit a new high of 84,694.46 during the session.
The Bank Nifty index also breached its previous highs after three months of consolidation and surpassed the 54,000 level on September 20. The index hit a fresh record high of 54,066.10. It closed 755.60 points, or 1.42%, higher at a new all time closing high level of 53,793.20.
“Bank Nifty index is walking on the Upper Bollinger band showing signs of continued bullishness and has found support at the 52,000 levels. Last week’s low can act as a support which if sustained, the rally in the index can further go up to 55,000 levels,” said Rahul Ghose, CEO of Hedged.in.
With the view on the upside, Ghose suggests a low-risk Bank Nifty Options strategy from hedged.in which makes money if the Bank Nifty trades above 54,200 by the end of 1st October expiry.
“Even if the Bank Nifty does fall down or stays sideways, the maximum risk in the trade is Rs. 750,” Ghose said.
Here’s Bank Nifty Options trading strategy for today by Rahul Ghose:
Bank Nifty Call Butterfly
Trade Structure:
> Buy 1 lot of the 1st Oct expiry 54000 CE at CMP
> Sell 2 lots of the 1st Oct expiry 54300 CE at CMP
> Buy 1 lot of the 1st Oct expiry 54400 CE at CMP
Trade rules:
The capital required in the trade is ₹36,300. This trade can be entered on Monday if Bank Nifty is trading between the levels of 53,400 and 53,800. The maximum loss in the trade is ₹750 and the target in the trade can be double the risk in the trade, Ghose said.
Trade Modifications:
The trade is protected with a limited risk of ₹750 per set. The trade needs a modification only if Bank Nifty falls below 53,000 levels, and if this happens, we can exit the first two legs booking profit and sell 55,000 CE of 30th October expiry and hold till breakeven, Ghose added.
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