This Short Strangle option strategy is for medium risk takers who is bullish on nifty and those who believe that nifty will trade in a range between 5200-5900. If you are the one then you can sell 5300PE and 5800CE which is trading at the premium of Rs 103.70 and Rs 30.90. And Maximum Profit potential if nifty expires between 5300 and 5800. i.e Total Profit of (103.70+30.90)x50=Rs6,627.50.
Lower Break Even = 5167.47
Upper Break Even = 5932.55
Above Open interest chart shows that 5200PE has the highest open interest among the option series which indicates that put writers are on the mood that
5200 will act as a support zone for the current option series
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Azad Jamal says
March 1, 2012 at 6:02 pmHi friend,
I think this is a very risky strategy . What happen if Nifty going below 5000, which is very likely I think as early as next week.
Azad
Rajandran R says
March 2, 2012 at 10:42 am@Azad
This strategy is only for those who belive that believe that nifty will trade in a range between 5200-5900. Yes it is a riskly strategy thats why i had mentioned medium risk. But currently 5200PE has higher open interest compared to other strike prices so chances of nifty test below 5200 is less as of now.
vimala says
March 27, 2012 at 12:42 pmHi Rajandran are you giving daily alerts? How to follow your alerts ?
Vimala
Rajandran R says
March 27, 2012 at 1:44 pmIam not providing any alerts/Services. For Realtime Updates you can follow me at twitter