Open Interest build-up remains concentrated at the 23,900 and 24,000 Put strikes , while the highest Call writing is visible at the 24,200 strike in the derivatives segment, said Sahaj Agrawal, Head of Derivatives Research at Kotak Securities. “The options data continues to indicate a positive undertone, with put writers maintaining their dominance at lower levels.”
The combined technical and derivatives data suggests a trading range of 23,800–24,200 for tomorrow’s expiry, with both extremes likely to hold on a closing basis. Although the broader trend remains positive, today’s sharp rally may keep the index range-bound into expiry, making a Short Strangle strategy an ideal way to capitalize on accelerated time decay, he said.
To recall, the Nifty50 settled at 23,995.95, surging 228.50 points, or 0.96 per cent, on Monday. The Nifty Bank index surged 393.70 points, or 0.69 per cent, to end the session at 57,087.20, while the volatility gauge, India VIX, nosedived as much as 10 per cent to 12.66 levels.
Given this setup, Agrawal has suggested traders to consider deploying a short strangle strategy to capitalize on accelerated Theta (time decay) during the final trading session before expiry. He has suggested to sell a 24,250 call and 23,750 put in Nifty with an tentative inflow of 16.70. Stop loss for the same is kept at Rs 33, while the entire premium decay is seen target as the target for the same.
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
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