Nifty & Bank nifty option strategy for 3rd Oct Expiry

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We saw a huge recovery in September expiry. The nifty index gained 5.7% in September expiry. At the beginning of this expiry, the market was totally in the grip of the bear. After the surprise announcement by our Finance minister, the market took a U-Turn and we saw a sharp 8% rally in just 2 days.

Most of the FNO stocks closed with decent return in September expiry. BPCL, Siemens Ltd, Container Corporation of India and Page Industries are the top gainers. Gave 23% to 35% return.

On the sectoral front Metal, Auto and Nifty Bank are the top gainers gained more than 10%. The Pharma and IT are the only sectors which closed in Red.

We saw a lower rollover in October expiry. Rollover was 65% against the 69% in September expiry, which indicates a mildly bullish bias.

Nifty Chart this week

Nifty chart today

After a bold and surprise announcement by our finance minister, We saw a good rally in nifty. Nifty closed almost 8% in just two trading sessions.

You can see there is some profit booking on higher levels which drag nifty little lower but it still holds 200 days moving average. This is a good sign for some more recovery in nifty.

200 Day simple moving average is at around 11250, so this should be our support level for this trend. We saw a huge rally in a very short time, so the market is trying to take some halt here for its next journey.

If you look at the chart, you will find that there is a range between 11400 – 11700 where the market is trading right now. We can expect some more range-bound activity until we are not getting a breakout or breakdown.

Volatility is high in the market. Risk is also high so trade with proper risk management. Nowadays the movement is very high in market but we should trade only with the trend. Don’t do the same mistake, most of the peoples are doing in their trading. Do not try to catch a falling knife.

One more suggestion I want to share.

Nifty option chain analysis

Based on option chain data, the highest Open interest stands at 11600 CE & 11500 PE, followed by 11700 CE & 10400 PE. PCR of all strikes is 0.97, which indicates a neutral market. PCR at 11500 stands at 2.17, which is acting as an immediate support level.

The Put-call ratio at 11700 stands at 0.13, which is acting as a resistance level. Equally, important indicator Option Pain is at 11550, indicating weekly expiry at 11550. A shift in option pain will provide further levels.

If you don’t know how to analyze open interest. Just enrol for our Option Strategies – A Mentorship Program.

Nifty Option strategy

Nifty Option Strategy: Iron Condor

Possible adjustments: Shift Call spread to 100 points lower level after a successful breakdown from 11400. Shirt Put spread to 100 points higher level after a successful breakout from 11700.

There are some more advanced adjustments you can do to increase your profit% and convert this into a complete loss-free strategy. To learn these adjustments you can enrol in our Option Strategies – A Mentorship Program.

Bank Nifty Chart this week

Bank Nifty Chart

Bank Nifty is more volatile in compare to Nifty, that’s the reason we saw a huge more than 10% rally in September expiry.

If you look at the last 5 candles, you will find that banknifty is trading in a range but this range is very big. In fact, Movement is very wild in this index from last one week.

Neither it is following technicals nor it is following any data. In this type of market where you don’t have any proper idea, better let the market settle down first.

Once the market is settled, it will give you a range and trend by its own. We can make our decisions more conveniently after we get the proper range and trend.

If we talk about the charts, we can see there is a very big range (29400 – 30800), almost 1400 points in which bank nifty is trading nowadays.

At this stage any naked short trade can be dangerous, so better take limited risk trade with proper hedge only. Now we can say that bank nifty will trade in that range only until we are not getting any breakout or breakdown.

If we get a breakdown, then 200 DSMA will be our first support level. If you are holding a long trade, better book some profit. For a new long position let’s wait for a breakout from the range.

Bank Nifty option chain analysis

Based on option chain data, the highest Open interest stands at 31000 CE & 30000 PE, followed by 30500 CE & 29500 PE. PCR of all strikes is 0.79, which indicates a slightly overbought market. PCR at 29500 stands at 6.51, which is acting as an immediate support level.

The Put-call ratio at 30500 stands at 0.11, which is acting as a resistance level. Equally, important indicator Option Pain is at 30000, indicating weekly expiry at 30000. A shift in option pain will provide further levels.

If you don’t know how to analyze open interest. Just enrol for our Option Strategies – A Mentorship Program.

Bank nifty option strategy: Iron Butterfly

Bank nifty option strategy

Post your comments in the comment box if you have a query related to Bank nifty option strategy. You can ask any question related to options trading in the comment box.

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DISCLAIMER: – we are not a SEBI research analyst. Views posted here only for educational purposes. There is no liability whatsoever for any loss arising from the use of this product or its contents. This product is not a recommendation to buy or sell, but rather a guideline to interpreting specified analysis methods.  This information should only be used by investors and traders who are aware of the risk inherent in securities trading.

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