Nifty & Bank Nifty Trading Strategy as on 14 May’13

Nifty as on 13 May’13– 5980.45 (-126.80)       Bank Nifty as on 13 May’13 – 12568.85 (-211.30)

Nifty witnessed a sharp reversal, after steep rise of last twenty trading sessions, negating upside continuation. Lastly Nifty posted high of 6114.55, made a double top and turns lower.

Nifty Trading Strategy

I had given Nifty option Long Strangle Strategy.

Nifty Long Strangle

Strike Price

Options

Recomm

LTP

Profit/Loss

6200

CE

50.15

18.65

5900

PE

25.25

50.95

75.4

69.6

-5.8

Strategy is running in a minor loss of Rs. 6/- . Hold this position, as Nifty moves down further PE price will start rising and our strategy will enter into a profit. Tomorrow, If Nifty give one more weak close than we’ll turn our focus on downside, and add one more Put option in our strategy. But, we need one confirmatory close.

Bank Nifty Trading Strategy

I was expecting some wild movement in Bank Nifty and that is reason I had given Bank Nifty option strategy Long Straddle.

Bank Nifty Long Straddle

Strike Price

Options

Recomm

Lot Size

Profit/Loss

12800

CE

256

146.3

12800

PE

277

423.2

533

569.5

36.5

Strategy is running in a profit, but which is not significant. Traders may hold this position. We need one more weak close, to confirm bearish trend, subsequently we can add shorts in our kitty.

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