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- Bank Nifty: Options strategy to play Bank Nifty - The Economic Times.
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- 'Deploy Modified Call Butterfly Strategy In Bank Nifty'.
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Bank Nifty Option Strategies Booklet | Put Option | Option (Finance)
Commodities Views News. Forex Forex News. Currency Converter. More Sitemap Definitions. Powered by. Ram Sahgal. Font Size Abc Small. The strategy called Bull Call Ladder can be initiated on expectation that the Bank Nifty would break past its record high of 32, The index closed at 31, The ladder is implemented by buying one call option at 32, level and selling two calls at 32, and 33, with the view of a 1,, point rise in the index this month from Wednesday closing.
A call option is purchased when a participant expects an underlying stock or index to rise. Assuming Wednesday closing rates, the trader buys the 32, call for Rs a share 25 shares make one contract. She simultaneously sells a call at 32, for Rs and one at 33, for Rs By selling calls, she receives an inflow of Rs a share.
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This more than covers the upfront cost of the 32, call. Actually, after buying the 32, call the trader is left with credit of Rs Thus, even if Bank Nifty expires below 32,, the trader gets to keep Rs , as apart from the purchased call, the sold ones expire worthless.
Maximum profit of happens at 32, and 33,