Nifty is likely to cross 6300 by expiry due to following reasons.
- Sustained buying by FIIs – incoming smart money
- Sustained selling by DIIs – outgoing dumb money
- High implied volatility in far month series as most traders are still holding short.
- High premium in nifty futures contract as most traders continue to take short.
- Possible good Q3 results.
- Put call ratio at 1.3 indicating strong support at 6000 zone.
Given all the above facts, one can safely use following strategy
Long nifty 6100 call @125
Short nifty 6300 call @36.6
Max profit at 6300 is 110.45(Rs.5522), max loss at 6100 is 89.55(4477.5)
Long nifty 6100 put @71.5
Short nifty 6300 put @180.95
Max profit at 6300 is 106.55 (Rs.5327), max loss at 6100 is 93.45(4672.)
Long nifty 6200 call @71(moderate risk). Max profit: Infinity
Long nifty 6300 call @35.60(low risk) Max profit: Infinity
Please choose trades based on your risk appetite. There is risk involved in this kind of trades as detailed above. This trade is for educational purpose. Hold all positions till expiry.
Narendar Rathod, options strategist, www.assuredgain.com