Bull or bear trading strategy: How to trade Nifty, Bank Nifty for 15 July F&O weekly expiry

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Nifty, Bank Nifty weekly expiry trading strategy.

By Raushan Kumar

The benchmark index concluded the weekly July 8 expiry on a subdued note amid weak global cues that dented market sentiments. On an expiry-to-expiry basis, the Nifty50 closed 47 points or 0.15% higher at 15,727 and the Bank Nifty closed 447 points or 1.20% higher at 35,274. 

For the coming 15th July expiry, the index bullish /bearish levels are :

Nifty futures: 15,913 to act as target-1; 15,962 to act as target-2; and 16,209 to act as target 3.

How to trade Nifty 50 based on above chart levels (based on Quant and Volatility calculation )?

Bullish move: If Nifty futures cross 15,800, investors can buy index future and put option of 15,800 with a Stop loss of 15,660 (on closing basic or trade below this level more than 15 min.). If it achieves target-1 of 15,913 during the day or any point during the week, revise stop loss to 15,800 and hold the trade. If target-2 of 15,962 is achieved, revise the stop loss to 15,878 and hold the trade. Continue this till target 3 is not achieved or trailing stop loss is not triggered. If trailing stop loss triggers, then close the hedging option position as well.

Bearish move: If Nifty futures fall below 15,660 then sell index futures and buy 15,650 call option with stop loss of 15,800 (on closing basic or trade below this level more than 15 min.). If it achieves target-1 of 15,546 during the day or any point during the week, revise stop loss to 15,660 and hold the trade. If target-2 of 15,500 is achieved, revise the stop loss to 15,580 and hold the trade. Continue this till the last target is not achieved or trailing stop loss is not triggered. If trailing stop loss triggers, then close the hedging option position also.

Bank NiftyBank Nifty: 35,680 to act as target-1; 35,800 target-2; 36,350 target target-3.

How to trade Bank Nifty based on the above levels (based on Quant and Volatility calculation ) ?

Bullish move: If Bank Nifty futures cross 35,500 then buy index future and 35,500 put option with Stop loss of 35,000 (on closing basic or trade below this level more than 15 min.). If it achieves target-1 of 35,680 during the day or any point during the week, revise stop loss to 35,500 and hold the trade. If target-2 of 35,800 is achieved, revise the stop loss to 35,600 and hold the trade. Continue this till last target-3 of 36,350 is not achieved or trailing stop loss is not triggered. If trailing stop loss triggers, then close the hedging option position also.

Bearish move: If Bank Nifty futures fall below 35,000 then sell index futures and buy 35,000 call option with stop loss of 35,500 (on closing basic or trade below this level more than 15 min.). If it achieves target-1 of 34,870 during the day or any point during the week, revise stop loss to 35,000 and hold the trade. If target-2 of 34,750 is achieved, revise the stop loss to 34,950 and hold the trade. Continue this till the last target is not achieved or trailing stop loss is not triggered. If trailing stop loss triggers, then close the hedging option position also.

(Raushan Kumar FRM, CFA, is a derivative analyst at IIFL Securities. Only Active traders should use this strategy. Trade with minimum 3 lot or ratio of 3 lot. Views expressed are the author’s own please consult your financial advisor before investing.)

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