Low risk bear spread strategy in NIFTY

Last few days FIIs were selling. OI table analysis, IVs had gone up indicated PUT buying for hedge long bets.

You may notice first time in the series lot of unwinding in 8250 to 8000 PUTs and equally high addition of CALLs. This signals bearishness creeping in.
But still Modi factor is around. No one can hold hand of BJP in event management. All our earlier PMs have gone to US earlier, but the way Modi visit and news (even what he will eat or fast etc) are being managed, market will find some or other reason soon to bounce back.
But one should wait before buying. See chart.

7940-7920 level (blue spot) is very important for bulls. It should not be broken for up trend to be intact or there could be further downside in near future.

Bear spread strategy in NIFTY:
Buy 8000 PUT of NIFTY around 24 and sell 7950 PUT around 12.
Maximum loss per lot will be  about Rs. 600/- and profit potential Rs. 1900/-

Or one can buy only 7950 PUT around 11-12. Maximum loss Rs. 600/-, and unlimited profit potential.
This is really low risk trade and one can enter in to trade with multiple lots depending upon profit gained so far in this month. If your profit this month does not permit to take the risk, do not enter in this trade.

Book profit in DLF
Book profit in AUROPHARMA


Disclaimer: This blog does not take any responsibility of your profit/loss.