How to trade Nifty for May 30 weekly expiry?

At 13:03 hrs IST, the Sensex was up 91.89 points or 0.12 percent at 75,509.93, and the Nifty was up 35.30 points or 0.15 percent at 23,003.00.

The strong resurgence of bulls has driven the Nifty to touch a new all-time high of 23,004.05 in today's morning trading session. By noon, the Nifty traded flat at around 22,900 levels, with support at 22,700.

The index targets have now shifted towards 23,500 levels. Experts suggest taking a bull call spread or a long broken wing call condor spread for the May 30 weekly expiry to capture the bullish momentum.

Amid rising volatility and new all-time highs, here's how experts are positioning the market:

Ruchit Jain, Lead Research at 5Paisa.com, said: "The immediate supports for the Nifty index are placed around 22,700 and 22,500, while on the higher side, the index has the potential to rally towards the 23,400-23,500 zone. Hence, from a positional perspective, one should look to trade with a positive bias."

Bull Call Spread Strategy recommended by Jain

Bull Call Spread (May 30)

- Buy NIFTY CALL 23,000
- Sell NIFTY CALL 23,300

Net Premium Outflow: 117
Stop Loss: 45
Target: 260
Breakeven: Above 23,117

Santosh Pasi, derivatives trader, also has a bullish view. He recommends taking a Long Broken Wing Call Condor Spread for the May 30 expiry:

Long Broken Wing Call Condor Spread (30 May) recommended by Pasi

Buy CALL 22,900
Sell CALL 23,100
Sell CALL 23,200
Buy CALL 23,400

Margin: Around Rs 25,000

Enter when NIFTY is around 22,900.

Breakeven: Above 22,976Target: Expiry between 23,000 and 23,200. There is no risk on the upper side.

Volatility continues to rise, with India VIX holding strong at 21.75 levels.

"The month of May witnessed high volatility at the start, with FIIs selling equities in the cash segment and forming short positions in the index futures segment. However, domestic investors were buyers in this phase, preventing any price-wise correction. The index formed a support base and rallied higher in the last week. FIIs have started covering their short positions, leading to new record highs in the index," explained Ruchit Jain.

India VIX has rallied higher this month due to the upcoming event (election results). "Generally, if VIX rises before the event and the outcome is as expected, it cools off post-event. Hence, we expect volatility to settle down once the event is over. Only if the election results deviate significantly from market expectations will volatility increase further due to rising uncertainty. But for now, there are no bearish signs, and it seems that the index could rally higher in the short term," said Jain.

Also read: Option strategy of the day | Reversal breakout in Reliance Industries signals upside

The bull call spread is a type of options trading strategy that involves two call options. This type of strategy is used when the trader expects a moderate rise in the price of an underlying asset. The bull call strategy is executed by buying call options at a specific strike or exercise price while also selling the same number of calls of the same asset at a higher strike price.

Also read: F&O Manual | Nifty soars to a new all-time high; breather expected before uptrend towards 23,500

A Long Broken Wing Iron Condor is an options strategy involving four contracts of the same expiration date but different strike prices. This strategy creates a wide profit range, with the "broken wing" referring to the uneven distribution of strike prices. It aims to generate income from premium selling while limiting potential losses, typically utilised when the trader anticipates the underlying asset will trade within a specific range with limited movement beyond certain levels.

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