F&O Strategy Today: Global Cues Positive; Gift Nifty Higher | Futures & Options Trade

Summary

The video discusses the Indian stock market, focusing on the Nifty's consolidation around 23,300 and the impact of weekly options expiry. It outlines an options strategy involving buying and selling puts for different expiry dates to capitalize on expected market movements. The discussion includes potential adjustments and risk-reward analysis, with a specific focus on Dixon Technologies as a stock to watch, suggesting a bull call spread strategy if the price crosses 10,400.

Takeaways

• 📈 The Nifty is consolidating around the 23,300 mark with little change in open interest for Futures.
• 📉 Bank Nifty saw a 5% unwinding in open interest, possibly due to the weekly options expiry.
• 📊 There was a 4% advance in Bank Nifty, but the overall market movement was mixed with more gainers than losers.
• 🏦 Stocks like Sun TV, Uja Cement, and Crompton had long positions, while Pedite and Interlobe Aviation had short positions.
• 📌 The 23,000 put has seen substantial accumulation, which could act as a base for today's trade.
• 🔢 There is substantial writing around the 23,400 and 23,500 calls, indicating potential resistance levels.
• 📉 A small downtick in the market is expected in the second half of June and July, but not breaching 22,500 on the downside.
• 📝 The suggested option strategy involves buying the 23300 put of July series and selling two puts of 23,000 and 22,000 of 4th July to offset the premium.
• 🔄 Adjustments to the option strategy would involve rolling over the 4th July puts to subsequent weeks if Nifty stays above 23300.
• 💡 The risk for the option strategy is considered low with a stop loss at 22,200, expecting a reward that is double the risk.
• 🔍 Dixon Technologies is on the radar for a potential bull call spread strategy if the price crosses 10,400.

Q & A

What is the current status of the Nifty index as per the script?

The Nifty index is currently in a state of consolidation, trading around the 23,300 mark.

What happened to the open interest in the bank Nifty futures on the day of the script recording?

There was an unwinding of nearly 5% in the bank Nifty futures open interest.

How did the bank Nifty perform on the day of the script recording?

The bank Nifty saw an advance of about 4% on that day.

What is the significance of the 23,000 put in the script's context?

The 23,000 put has seen substantial accumulation and could potentially serve as a base for the day's trade.

What resistance levels are mentioned for the Nifty index in the script?

There is substantial writing around the 23,400 and 23,500 levels, which could provide resistance on the higher end.

What was the overall market trend in terms of gainers and losers on the day discussed in the script?

There were more gainers than losers, indicating a mixed market trend.

What is the recommended option strategy by Rul for the Nifty index according to the script?

Rul suggests buying the 23300 put option of the July series and selling two put options of the 4th July expiry at 23,000 and 22,000 to offset the premium.

What is the approximate premium for the option strategy discussed by Rul?

The premium for the bought put option is around 320-330 rupees, and the inflow from selling two put options is about 180 rupees.

What is the adjustment strategy for the option structure if Nifty stays above 23300?

If Nifty stays above 23300, the 4th July sold puts would be bought back, and new puts for the 11th and 18th of July would be sold in a rolling fashion.

What is the risk-reward ratio for the discussed option strategy?

The risk is between 1,500 and 2,500 rupees per lot, with an average reward expectation of around 3,000 rupees, making it an acceptable double of the risk.

What stock is mentioned in the script for a potential bullish options strategy?

Dixon Technologies is mentioned, with a strategy to buy the 10,500 call and sell the 10,600 call of the June end expiry once the price crosses 10,400.