F&O Radar | A strong strangle in Nifty is in place to secure potential gains in the index

He Skilled has erupted above the trend resistance 25,330 level, with global markets remaining in a consolidation setup near critical breakout points. On Thursday, the Nifty rose nearly 2%, closing at a fresh Historical maximum of 25,389.

Traders are closely watching the upcoming developments. Fed MeetingThere is a probability of 25 basis points. Reduction of rateswhich has had a positive impact on the markets.

“In our view, the medium-term setup has turned positive for significant upside ahead. We suggest buying on dips in ‘value and trend’ opportunities, particularly in metals and Private Banking sectors,” said Sahaj Agrawal, senior vice president and head of derivatives research at Kotak Values.

based on options dataThe momentum support at 24,750 for September has matured. A positive bias, coupled with strong support, helped the Nifty50 to overcome the resistance barrier of 25,330 and close around 25,400, Agrawal added.

Considering these data, Sahaj Agrawal recommends a Strong choke Strategy for potential profits:

The Strong Strangle strategy involves purchasing an out-of-the-money (OTM) call option and an out-of-the-money (OTM) put option on the same asset with the same expiration date. This strategy aims to profit from significant price movements in either direction. The term “strong” refers to the options being priced far from the current price to reduce the cost while still allowing for potential profits if the asset experiences significant volatility.

(Prices as of September 12)

Below is the strategy results chart:

(Source: Kotak Securities)

(Disclaimer:The recommendations, suggestions, views and opinions of the experts are their own and do not represent the views of the Economic Times)