Best Option Strategy of Nifty ahead of budget session

Dear reader,

Welcome to the latest edition of our newsletter, where we share with you the best options strategy of Nifty ahead of the budget session.

As you may know, the budget session of the Indian parliament is a crucial event for the financial markets, as it can have a significant impact on the economy and stock prices.

The Nifty index, which represents the performance of the stock market, is especially sensitive to budget announcements, as they can affect the interest rates, credit growth, and profitability of the banks.

Therefore, many traders and investors look for ways to profit from the volatility and the directional movement of the Nifty index during the budget session.

In this newsletter, we will discuss the best option strategy of Nifty ahead of the budget session, and how to implement it using the latest tools and techniques.

We will also cover the benefits and drawbacks of the strategy and the factors that can influence their outcomes.

Whether you are a beginner or an expert in options trading, this newsletter will help you gain an edge in the Nifty market and maximize your returns.

So, without further ado, let’s dive into the best option strategies of Nifty ahead of the budget session.

The Best Options Strategy Ahead of Budget Session: Calendar Spread

A calendar spread is a strategy that I prefer because of the nature of its greeks.

A Calendar Spread option strategy involves buying and selling options of the same underlying asset, the same strike price, but different expiration dates.

The idea is to take advantage of the difference in the time decay and the volatility of the two options.

For example, you can buy a Nifty call option with a longer expiration date and sell a Nifty call option with a shorter expiration date, both having the same strike price.

This way, you can profit from the faster decay of the short-term option and the higher premium of the long-term option.

One of the benefits of this strategy is that it is a low-risk and low-cost strategy, as you only pay the net premium of the two options.

Another benefit is that it is a neutral strategy, meaning that you do not need to predict the direction of the market movement. You only need the Nifty index to stay within a certain range around the strike price.

However, one of the drawbacks of this strategy is that it is sensitive to changes in volatility and interest rates, which can affect the value of the options. Therefore, you need to monitor the market conditions and adjust your position accordingly.

Best Option Strategy in Nifty for Budget Session

Let’s look at the chart first:

Based on the chart and Oi data, 21000 - 22000 is the range for the coming session. Based on the range we can initiate the below strategy.

Follow the above strategy for the coming session ahead of the budget session.

Adjustments are as follows: