Bull Market: Weekly Options Strategy: Aim at 16,000-16,200, go for the Bull Call Ladder

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strategy position

Buy 7 Jul 15800 Call 141; Sell ​​7 Jul 16000 Call 64.5 and Sell 7 Jul 16200 at 20.5 (1 lot each).

argument

nifty Quiet last week even after quarterly and monthly settlement and trial series VWAP Around 15900, it went below the 15700 level. A change in policy on the back of Friday’s fall saw a sell-off among the oil and gas giant. However, the broader markets outperformed relatively and ended the week in the green.

Going forward, a round of short covering can be expected looking at the upcoming quarterly results and Nifty is likely to move towards 16,000 in the coming sessions.

From data perspective, Call Open Interest for upcoming weekly settlement is visible at 16,000 strike while Put Base ATM is placed at 15600 strike. Hence the positive bias should continue till Nifty remains above 15,600 levels and may try towards 15900/16000 levels in the coming sessions.

From a rollover perspective, FIIs’ net shorts have largely remained intact and positions have been rolled over in the July series as net shorts in index futures exceeded 1 lakh contracts. On the other hand, net long stock in stock futures remained higher indicating specific accumulation.

Targeting between 16,000 and 16,200, we think traders can go for it bull call ladder Strategy where maximum profit will be made between 16,000 and 16200. However, one needs to be careful on the higher side as well as the strategy will start making losses if Nifty moves above 16350 at current settlement.

Traders will be in profit if Nifty stays or ends between 15,850 to 16,350 levels.

Pay-off diagram:

payoff diagram 1agencies

(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. They do not represent the views of The Economic Times)

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