High Risk Options Strategy on Expiry Day

Yesterday was one of those trend less days. After gaining almost 136 points yesterday, NIFTY gave up 25 points in a lackluster trade. The Nifty witnessed an intraday movement of about 87.60 points. The closing index was 0.51 % down as compared to the previous closing index. However, shares advanced decline ratio is 438 to 1034.

Indian Share Market Short-term trend is UP

-----------------------------------------------------

NIFTY opened at 5005.5 and couldn’t touch that level today. From price action point of view, market did went up higher than yesterday’s high and days low was higher than yesterday’s low. So, we can say the short-term uptrend is still intact. Though, I would have liked it to close higher than yesterday’s close price.

This short-term up trend could continue for few more days as the stochastics turned up from the oversold zone. And MACD signal is confirming this as well. Important levels to watch out are: 4900 on the downside and 5000. If market were able to cross above 5000, it could move up to 5050 and 5100. On the downside, it could find supports at 4870 and 4820.

On the sector front, IT, Pharma, FMCG sectors performed better with average gain of 0.7% and Banking sector dragged the index down. Banking sector was down by 1.12%.

It appears that 4750 – 5200 is the NIFTY range for few more weeks.

Today, as of now, NIFTY is taking support at 4905. Typically day's range has been around 80 - 100 for the past few days. So, market could test the resistance level for the day at 4995. Following is the strategy to take advantage of that scenario.

BUY 1000 NIFTY SEP 5000 CE at 2.25

After buying, immediately place following sell orders

1) SELL 250 NIFTY SEP 5000 CE at 4.50
2) SELL 250 NIFTY SEP 5000 CE at 9.95
3) SELL 250 NIFTY SEP 5000 CE at 15.45
4) SELL 250 NIFTY SEP 500 CE at 19.95

Maximum loss Rs. 2250
Maximum profit Rs 10212