Bank Nifty was trading moderately lower amid volatility, falling nearly 200 points, or 0.4 percent to 47,650, ahead of weekly options expiry due on May 15. For the expiry day trade the Bank Nifty has an immediate resistance at 47,950 and support at 47,600.
Bank Nifty expiry day view
"The Nifty index has been much stronger than Bank Nifty, for the last couple of days, which also seems to be the case today. But looking at the wild swings since morning, it is better to plan a strategy that works on both sides,” said Rahul Ghose, CEO Hedged.in.
“Bank Nifty has an immediate resistance at 47,950, and support at 47,600. A break of one of these levels can take the banking index to its next immediate resistance at 48,450 or to its next immediate support at 46,980,” said Rahul Ghose.
According to Sudeep Shah, DVP and Head of Technical and Derivative Research at SBI Securities, "For the day, 47,650-47,700 will act as crucial support for the index while resistance is seen at 48,100-48,150.”
Any sustained rise above 48,150 will lead to a sharp upside rally up to 48,400, followed by 48,700 in the coming sessions, he said.
Expiry day strategy: Low-risk Options strategy which makes money if the Bank Nifty moves in either direction by the end of today's expiry.
Bank Nifty Expiry Special:
Trade Structure:
(+1) Buy 1 lot of the 15th May expiry 47,800 PE (put option) at Rs 175
(+1) Buy 1 lot of the 15th May expiry 47,800 CE (call option) at Rs 62
(-1) Sell 1 lot of the 15th May expiry 47,600 PE (put option) at Rs 75
Trade rules:
The capital required for the trade is Rs 18,500 per lot.
This trade can be entered today if Bank Nifty trades between 47650 and 47800.
The maximum loss in the trade is Rs 600 per lot, and the target profit should be 1.5-3 percent of capital, depending upon the time and individual risk appetite.
Also read:
Trade Modifications:
The trade is protected, and a modification is required only when the Bank Nifty spot price remains at 47,700-47,800 levels till 2:00 PM. If this happens, the sold put option can be rolled up closer to get some more credit.
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