Budget Weekly Option Strategies By Axis Securities
Bullish View Strategy ( 3rd FEB Expiry)
The strategy which we are suggesting for Union Budget is a Bullish strategy called as CALL LADDER, which involves Buying of one lot of NIFTY 17,100 Call @ 254 & selling of one lot each of 17,400 Call @ 135 & one lot of 17,700 Call @ 62. The sold deeper out of the money call greatly reduces the upfront cost of overall strategy; however any significant move above the extra sold leg can incurred unlimited loss, hence above Upper BEP it’s advisable to exit the strategy in total to avoid UNLIMITED losses. The cost of the strategy involves outflow of Rs 2,850 which is the maximum loss if NIFTY trades & remains below 17,150 levels on expiry day while maximum profit of Rs 12,150 will be attained above 17,400 levels, while strategy will start making loss above 17,950 and hence above the said level its advisable to exit the strategy. Upper BEP is 17,943 and Lower BEP is 17,157.Below is the Pay-Off on the expiry day at various strikes.
Bullish View Strategy ( 10TH FEB Expiry )
The strategy which we are suggesting for Union Budget is a Bullish strategy called as CALL LADDER, which involves Buying of one lot of NIFTY 17,100 Call @ 338 & selling of one lot each of 17,400 Call @ 210 & one lot of 17,700 Call @ 122. The sold deeper out of the money call greatly reduces the upfront cost of overall strategy; however any significant move above the extra sold leg can incurred unlimited loss, hence above Upper BEP it’s advisable to exit the strategy in total to avoid UNLIMITED losses. The cost of the strategy involves outflow of Rs 300 which is the maximum loss if NIFTY trades & remains below 17,100 levels on expiry day while maximum profit of Rs 14,700 will be attained above 17,400 levels, while strategy will start making loss above 18,000 and hence above the said level its advisable to exit the strategy. Upper BEP is 17,994 and Lower BEP is 17,106.Below is the Pay-Off on the expiry day at various strikes.
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