FINANCE INTREST

  Strangle Option Strategy with Nifty Example What is a Strangle Strategy? A Strangle is a neutral options strategy where a trader: Buys one OTM Call Option Buys one OTM Put Option Same expiry date Different strike prices This strategy is used when you expect a big move in the market , but you are not sure about the direction — similar to a Straddle — but with lower cost and wider break-even range . Example: Nifty Strangle Strategy Nifty Current Level: 25600 Buy 25800 CE @ 120 Buy 25400 PE @ 120 Total Premium Paid 120 (Call) + 120 (Put) = 240 points So your total investment = 240 points Break-Even Calculation Upper Break-Even: Call Strike + Total Premium 25800 + 240 = 26040 Lower Break-Even: Put Strike – Total Premium 25400 – 240 = 25160 So Nifty must move: Above 26040 OR Below 25160 to start generating profit. Maximum Profit ✔️ Unlimited Profit Potential If market makes a strong move in either direction. Maximum Loss ❌ Limited to Total Premium Paid = 240 points If Nifty expires...

  Straddle Option Strategy with Nifty Example  What is a Straddle Strategy? A Straddle is a neutral options strategy where a trader: Buys one Call Option Buys one Put Option Both with the same strike price Same expiry date This strategy is used when you expect a big move in the market , but you are not sure about the direction (up or down). It is commonly used before major events like: RBI Policy Budget Election Results Global economic announcements Example: Nifty Straddle Strategy Nifty Current Level: 25600 Buy 25600 CE @ 200 Buy 25600 PE @ 200 Total Premium Paid 200 (Call) + 200 (Put) = 400 So your total investment = 400 points Break-Even Points To calculate break-even: Upper Break-Even: Strike Price + Total Premium 25600 + 400 = 26000 Lower Break-Even: Strike Price – Total Premium 25600 – 400 = 25200 So Nifty must move: Above 26000 OR Below 25200 to start making profit. Profit & Loss Scenario 1️⃣ If Nifty goes to 26200 25600 CE will gain strong value 25600 PE will l...

  Iron Butterfly Strategy  with Example (Nifty) Example (Nifty February Expiry) 📌 Given Trade Setup Sell 25400 CE @ ₹220 Buy 25600 CE @ ₹80 Sell 25400 PE @ ₹180 Buy 25200 PE @ ₹80 This creates an Iron Butterfly centered at 25400 strike . 1️⃣ What is an Iron Butterfly? An Iron Butterfly is a neutral options strategy where: You sell an ATM Call and ATM Put (same strike price) You buy an OTM Call and OTM Put for protection It is a limited profit, limited loss strategy. This strategy benefits when the market remains range-bound near the strike price until expiry. 2️⃣ Net Premium Calculation Premium received: 25400 CE Sell = ₹220 25400 PE Sell = ₹180 → Total Premium Received = ₹400 Premium Paid: 25600 CE Buy = ₹80 25200 PE Buy = ₹80 → Total Premium Paid = ₹160 👉 Net Credit Received = ₹400 – ₹160 = ₹240 3️⃣ Maximum Profit Maximum Profit = Net Premium Received = ₹240 per lot This happens if Nifty expires exactly at 25400 . At this point: Both sold options expire worthless Bo...

Iron Condor Strategy With Nifty Example The Iron Condor is a neutral options strategy formed by combining: ✅ Bull Put Spread ✅ Bear Call Spread It is best suited when you expect the market to remain range-bound with limited volatility. This strategy offers: ✔ Limited Profit ✔ Limited Loss ✔ High Probability Setup ✔ Benefit from Time Decay (Theta Positive) Let’s understand with your exact example using NIFTY 50 . 📌 Market Assumption Assume Nifty is trading near 25400 and you expect it to remain between 25200 and 25600 till expiry. You create an Iron Condor as follows: 🔹 Step 1: Bull Put Spread (Lower Side) Sell 25400 PE @ ₹200 Buy 25200 PE @ ₹80 Net Credit (Put Spread) 200 – 80 = ₹120 This spread profits if market stays above 25400. 🔹 Step 2: Bear Call Spread (Upper Side) Sell 25600 CE @ ₹220 Buy 25800 CE @ ₹90 Net Credit (Call Spread) 220 – 90 = ₹130 This spread profits if market stays below 25600. 💰 Total Premium Received Put Spread Credit = ₹120 Call Spread Credit = ₹130 ✅ To...

Bull Put Spread Strategy with Nifty Example The Bull Put Spread is a popular bullish options strategy used when you expect the market to stay above a certain level or move slightly upward. It is a limited profit, limited loss strategy and works best in a range-bound to mildly bullish market . It is also called a Credit Put Spread because you receive premium upfront. What is a Bull Put Spread? A Bull Put Spread involves: 🔹 Selling a higher strike Put Option 🔹 Buying a lower strike Put Option 🔹 Same expiry date This strategy benefits from: ✔ Time decay (Theta) ✔ Stable or rising markets ✔ Defined risk Example: Nifty February Expiry Using the same strike structure concept (200-point difference) as your previous example: Sell Nifty Feb 25500 PE @ ₹222 Buy Nifty Feb 25300 PE @ ₹50 Assume Nifty is trading near 25500 . Step 1: Net Premium Received (Credit) Net Credit = 222 – 50 Net Credit = ₹172 This ₹172 is your maximum possible profit . Maximum Profit Maximum Profit = Net Premium Re...

  Bear Call Spread Strategy  with Nifty Example The Bear Call Spread is a popular bearish options strategy used when you expect the market to stay below a certain level or move slightly downward. It is a limited profit, limited loss strategy and works best in a range-bound to mildly bearish market . What is a Bear Call Spread? A Bear Call Spread involves: 🔹 Selling a lower strike Call Option 🔹 Buying a higher strike Call Option 🔹 Same expiry date It is also called a Credit Spread because you receive premium upfront. Example: Nifty February Expiry Let’s understand with your given strikes: Sell Nifty Feb 25500 CE @ ₹222 Buy Nifty Feb 25700 CE @ ₹50 Assume Nifty is trading near 25500 . Step 1: Net Premium Received (Credit) Net Credit = 222 – 50 Net Credit = ₹172 This ₹172 is your maximum possible profit . Maximum Profit Maximum Profit = Net Premium Received = ₹172 per lot 👉 This happens if Nifty expires at or below 25500 . Both options expire worthless, and you keep the f...