Deploy Lengthy Straddle on Nifty50 for November sequence, explains Shilpa Rout

“For NIFTY the very best technique is LONG STRADDLE at 17800 on month-to-month expiry. There may be an expectation of a robust one-side transfer from present ranges, and this technique reaps good features from such eventualities,” says Shilpa Rout – Derivatives Lead Analyst, Prabhudas Lilladher Pvt Ltd.

In an interview with ETMarkets, Rout, mentioned: “17700 is a really essential degree to look at on, a breach beneath this on a closing foundation will see 17200, in any other case 18400 shouldn’t be very far off” Edited excerpts

:

What per week for Indian markets. Nifty reclaimed 17700 ranges whereas Sensex additionally managed to hit 59K. What led to the worth motion?

The Nifty moved greater than 2% from its previous week and this transfer was clearly led by banking, auto, oil & gasoline, pharma, and steel sectors.

The optimistic quarterly outcomes of main corporates together with the festive week additional accelerated the market to maneuver upward.

There was fairly a broad-based participation from many segments and thus we have now now an elevated assist base for the bulls.

Primarily based on October sequence knowledge the place do you see markets headed in November?

The Nifty rolls have been seen at 76%, which is consistent with a previous few months’ common, and Banknifty at 77%, which is approach decrease than the earlier sequence common.

Possibility chain displays a buying and selling vary of 40000-43000 for the Index on a broad foundation, with 41500 being a vital degree to be sustained.

Banknifty month-to-month expiry sequence possibility chain reveals 42000 straddle the place most PE and CE contracts are added over 30000 every.

For the Nifty50 16000, 17000, and 17500 are energetic strike charges the place the best PE writers have constructed up their positions which supplies a draw back vary if the present ranges should not sustained.

On the upside, the CE writers are including up their positions on 18000, 18500, and 19000 ranges of over greater than 40000, 30000, and 20000 contracts every.

For now, 17700 is a really essential degree to look at, a breach beneath this on a closing foundation will see 17200, in any other case, 18400 shouldn’t be very far off.

Any occasions which merchants ought to be careful for that might dent the bull run?

There are a lot of occasions lined up within the first week of the sequence now just like the FED assembly, attainable charge hikes, our home occasions of the RBI meet, and naturally the struggle disaster.

These are just a few eventualities that can result in some turbulence in our market, however the view stays intact for the upmove on a positional foundation.

Any technique that may be deployed based mostly on the F&O knowledge?

For NIFTY the very best technique is LONG STRADDLE at 17800 on month-to-month expiry. There may be an expectation of a robust one-side transfer from present ranges, and this technique reaps good features from such eventualities.

The technique offers good returns as quickly because the sharp motion occurs on one aspect.

One may also play by way of BULL CALL SPREAD: Purchase 17800CE and Promote 18200CE.

(Disclaimer: Suggestions, strategies, views and opinions given by the consultants are their very own. These don’t characterize the views of Financial Instances)