Indian benchmark indices are trading higher and hitting new record highs amid volatility on July 18. Ahead of the Union Budget, the Nifty is trading near the 24,800-mark, indicating continued bullish momentum.
According to Santosh Pasi, a derivatives trader, the market is expected to see heightened volatility as the budget nears. He recommends a Double Calendar Spread strategy for traders positioning for the budget:
"This strategy is to take advantage of increasing volatility. We will be taking the trade now and booking it before the announcement of the budget," said Pasi.
Strategy Recommended by Pasi: Double Calendar Spread
Short Call 24700 for July 25
Long Call 24700 for August 29
Short Put 24400 for July 25
Long Put 24400 for August 29
Maximum Loss Risk: Around Rs 11,500
In case volatility increases, the maximum profit potential will increase and vice-versa.
Also read: Dos and Don’ts for traders to protect from big losses on Budget day
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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