Nifty settles above key chart levels in July

Outline your options strategies with the Compositedge- Protrader platform

 

In late January this year, India’s primary index, the Nifty-50 hit all-time highs of 11,171.55, before skidding more than 10 percent to slide below 10,000 in March. Since then, the index has made several unsuccessful attempts to surge beyond all-time peaks with the rally in May within striking distance of 11k, before fizzling out by the end of the session. Earlier this month, Nifty settled above 10,850 for the first time since February this year, which many analysts consider significant chart breakouts.

We have put together a couple of options strategies and the corresponding payoff diagrams here. If you are a risk- averse trader and believe the Index will extend its rally from current levels, you can take a look at Strategy-1. However, if you expect the Index to remain in the 10,800- 11,200 range for the rest of the month, Strategy-2 should work for you.
Your options strategies can be devised from the Protrader Option chain and the corresponding payoff chart can be viewed from Option analyser, and implemented with a single click from the trading terminal.

Strategy-1: Bull call spread

Buy an ITM call @ 10,800 and sell an ATM call @ 10,900
Net premium : 187.85- 118.65= -₹69.2
Max Profit : Difference between the two strike prices minus the net premium paid
Max drawdown : Difference between the premium paid for the long option and premium received for the short option.


Source: Compositedge- Protrader platform

Strategy-2: Short Straddle
Short a call and a put @ 11,000
Premium received: 129 + 65.05= ₹195.05
Max profit: ₹ 195.05, if Nifty settles at 11,000 on expiry
Max drawdown: Unlimited if Nifty slides below10, 805 or spikes above 11,195


Source: Compositedge- Protrader platform

The Protrader Options panel comes with a host of features to assist traders and Options strategists. Some of the key benefits in the one of a kind trading platform include

  • Multiple strikes for a selected scrip along with their premiums.
  • Column headers with the option to include Greeks and implied volatility.
  • View all tradable options contracts side by side or individually.
  • Display a predefined number of strikes in the panel.
  • Options analyser along with the payoff diagram in the “Paper trading” mode.
  • Include volatility and time to expiry to determine the effect on the P/L of a strategy.
  • One- click order entry irrespective of the number of calls/ puts included in the strategy.
  • Quick modification/ deletion of pending orders.

 

In addition, users can overlay Greeks in the options analyser to monitor the real- time impact on P/L and can include implied volatility/ time to expiry to define the probability on the payoff of a strategy. Traders can also overlay volatility smile charts of different expiries and look for risk- free arbitrage opportunities.

The Options Master is an excellent tool for Options traders. In addition to simplifying the way in which trades are placed, the platform ensures speedy entries/ exits, in- depth strategy analysis and real- time arbitrage opportunities.

 

Compositedge, incorporated in 1995, is a leading discount broker and provider of algo trading solutions for retail customers in India. Headquartered in Bangalore, we provide the internationally acclaimed Protrader platform, which comprises of charts, scalper, matrix, grid, time & sales, market-depth and options master in addition to the state of the art algo trading platform. We combine discount broking and algo trading solutions to ensure all our retail clients experience the finest trading amenities at affordable costs.