3 Nifty options strategy before election results from Motilal Oswal

A bullish momentum is expected if election results play positive and Nifty heads towards the 24,000 mark.

Expiry: 27th June 2024 Monthly expiry

Buy Nifty 24000 Call @ 110

Max Risk : Rs 2750/-

BEP on expiry basis : 24110

Max Reward : Unlimited above 24110

If Nifty moves in between or comes in the range of 21,780 to 23,220 zones, Motilal Oswal recommends the Iron Butterfly Strategy to get the benefit of Theta decay and fall in volatility.

Sell 1 lot of 22500 Call @ 660

Sell 1 lot of 22500 Put @ 460

Buy 1 lot of 23500 Call @ 220

Buy 1 lot of 21500 Put @ 180

Margin Required: Rs.35,000

Net Premium Received: 720 Points (Rs. 18000)

Max Risk: 280 Points (Rs. 7000)

Lot size: 25

Profit if it remains in between 21780 to 23220 zones

In case of an unfavourable election outcome, if Nifty corrects by 7-8%, Motilal Oswal recommends a Bear Put Strategy to hedge against the corrective move till 21,000 zones with a hedging cost of 1.50% till the end of June 2024.

Buy 1 lot of 22500 Put @ 470

Sell 1 lot of 21000 Put @ 120

Margin Required: Approx. Rs 20,000/-

Net Premium Paid: 350 Points

Max Risk: 350 Points (Rs. 8,750/-) if Nifty moves higher

Max Reward: 1150 Points (Rs. 28,750/-) if Nifty goes below 21000 zones

Risk: Reward: 1 : 3.28

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)