What-if Trading Plan: Arun Mantri suggests a long call buy if BJP-NDA gets more than 400+ seats

Lok Sabha Elections results is set to be announced on Tuesday, June 4, 2024.

With exit polls predicting a comfortable win for the BJP-led NDA coalition, markets are likely to see heavy activity on Monday. Still, the verdict is not a given, and traders will need to position themselves for any unexpected development.

Arun Kumar Mantri, derivatives trader and Founder of Mantri Finmart shares his strategies on how to position trades on election result day, considering various scenarios: What if BJP-NDA fails to form government, wins 280-320 seats; wins 320-360 seats; If it wins more than 400 seats:

Trading Plan for Monday by Mantri:

Scenario 1: If BJP-NDA Gets 320-360 Seats

Mantri’s View: The markets are expected to react positively. If BJP secures more than 350 seats, Nifty is likely to top 23,000.

Strategy: Buy NIFTY June 06 expiry 22800 CE at Rs 300

Stop Loss: 190

Targets: 520

Total Cost: Rs 300 premium (Rs 7500 per lot)

Maximum Profit: Unlimited on the upside

Maximum Loss: Rs 7500 per lot if the option expires worthless

Scenario 2: If BJP-NDA Gets 280-320 Seats

Mantri’s View: Nifty is expected to react negatively initially but may recover if BJP achieves an absolute majority by crossing the 272 mark. A buy on dips strategy will work in this scenario.

Strategy: Buy NIFTY June 06 expiry 22700 CE on dips at Rs 250

Stop Loss: 120

Targets: 440

Total Cost: Rs 250 premium (Rs 6250 per lot)

Maximum Profit: Unlimited on the upside

Maximum Loss: Rs 6250 per lot if the option expires worthless

Scenario 3: If BJP-NDA Fails to Form Government

Mantri’s View: This could be a disaster for the bulls. The Nifty could hit 21600-21700, with no quick recovery expected.

Strategy: Sell NIFTY June Future between 22600-22700

Stop Loss: 22900

Targets: 21700

Total Cost: Rs 7500 premium (if Stop Loss is triggered)

Maximum Profit: Unlimited on the downside

Maximum Loss: Rs 7500 premium (if Stop Loss is triggered)

Scenario 4: If BJP-NDA Gets More Than 400 Seats

View: This highly unexpected scenario could lead to the biggest rally of the current calendar year, with the Nifty likely topping 23500, along with significant gains in broader markets.

Strategy: Buy NIFTY June 06 expiry 23000 CE at Rs 240-280

Stop Loss: 120

Targets: 750

Total Cost: Rs 280 premium (Rs 7000 per lot)

Maximum Profit: Unlimited on the upside

Maximum Loss: Rs 7000 per lot if the option expires worthless

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