Bank Nifty Trading Strategy Today: How to trade Bank Nifty options on September 5? Rahul Ghose suggests this strategy

Bank Nifty Trading Strategy Today: Bank Nifty index has been sluggish, witnessing a narrow rangebound movement. On Wednesday, the index ended 288.85 points, or 0.56%, lower at 51,400.25.

Rahul Ghose, CEO of Hedged.in noted that Bank Nifty is slowly making higher highs and higher lows on the chart. The ADX (Green) line is above the ADX (Red) line, indicating strength in the index can pick up from here over the next few days.

According to him, Bank Nifty has a buy zone between 51,000 - 51,400 levels. Significant put writing below 51,400 levels also indicates strong support at 51,400 and below. 

With the view being sideways to mild upside, Ghose suggests a low-risk Bank Nifty Options strategy from hedged.in, which makes money if the Bank Nifty gradually moves up by the end of next week’s expiry or stays sideways. 

“What's best about this trading strategy is that, even if the Bank Nifty does move down, the strategy barely loses any money with the risk in the trade being ₹1,000 only,” Ghose said.

Here’s Bank Nifty options trading strategy from Rahul Ghose:

Bank Nifty Call Butterfly

Trade Structure:

> Buy 1 lot of the 11th Sept expiry 51600 CE at CMP 268

> Buy 1 lot of the 11th Sept expiry 52000 CE at CMP 128

> Sell 2 lot of the 11th Sept expiry 51900 CE at CMP 157

Trade Rules:

The capital required in the trade is ₹40,000 This trade can be entered if Bank Nifty is trading between the levels of 51,100 and 51,500. The maximum loss in the trade is ₹1,000 and the target in the trade should be 2% to 3% on the capital depending upon the time and individual risk appetite, Ghose said.

Trade Modifications:

The trade is protected with a limited risk of ₹1000 per set. If Bank Nifty moves below 50,900 levels, the sold legs 52,000 CE can be brought down by 100 or 200 points increasing the credit, to make the trade safer. The trade can be tracked live on www.hedged.in under options strategies, he added.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.