Options Idea

Weekly Nifty Options Trade Idea 16 September

Nifty seems to have gone up a lot from where it seems to have limited upside left. The probability of correction or range bound trade is higher. So, we have tried to create a low-risk trade for the 16th September Expiry.

Technical Analysis  

In the weekly timeframe, Nifty has formed a Doji near 17382 which is exactly at the Fibonacci extension of 1.7462 from the bottom of the March 2020 crash.

There also seems to have some resistance around the 17300-17400 zone.

Our assumption is that either it will correct a little bit or will remain rangebound. Also, the theta decay in the 16 September 17500 Strike price will be more than 17500 23 September.

Any sharp spike will be handled by positive vega.

Also, the number of days in the expiry is only 3 days, theta decay will be higher and India VIX has slightly cooled off.

We will take a calendar trade by 12:30 pm when the market becomes a bit stable.

Here is the trade set-up:

Sell 17500 Nifty 16 Sept CE @19

Buy 17500 Nifty 23 Sept CE @60   


Options Idea

The probability of profit in this trade is 43% and the maximum risk is 2000-2300 Rs. Though POP is less than 50%, considering that we are relatively sure of market direction, it is less relevant.

The margin required in this trade is 20482 R, which is quite low.

Risk Management

It’s a defined risk strategy of a maximum of 2300 Rs. No need to worry at all.  Further adjustments can be applied by Wednesday depending on the trade situation.

Vikash Kumar

An investor with more than 15 years of experience in the market. I m deeply interested in positional and momentum-based trading strategies and love learning strategies and backtesting.

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