Hey Folks! In this bank nifty weekly options strategy post, we will analyze Nifty50 and Bank Nifty based on technicals and option chain data. I will share one weekly options strategy for each index.
In every weekly analysis post, I’m taking a common problem and try to share a possible solution for that particular problem. So read this post till the end to find all the answers you are looking for.
Somewhere we all know that successful trading is not rocket science. Anyone can learn and be a successful trader. But from where? Nowadays you have so many resources where you can discover the tricks and techniques from many social media channels, But which one to follow?
You know how these things, tricks, or techniques work, But the real problems start when you start implementing. The results you are getting, are different. You are following the same method or steps you have learned, but still, results are not as per the expectations. Are you doing something wrong?
No, You are doing exactly what you have learned. You are coping with every single step you have learned from someone. Wait! Did you read it right? Take a pause and read again what I have written in the previous lines.
I said you are coping. Yes, you are copying as it is. Why I’m saying this? We all know that every person has a different mindset and different psychology. When the mindset and psychology are different, how can results be the same?
Let’s say we both, you and me, are doing the same thing, but my risk-taking capacity is different from yours. Let’s say I can take the risk of 2%, but for you, 1% is more than enough. I’m trading based on my risk appetite if you follow me and try to copy what I’m doing, somewhere you are panic when you saw your loss is more then 1%.
So what you have to do is, learn from various sources and then optimize it based on your mindset, psychology, and risk appetite. Instead of just follow a strategy, you should learn the basics of that strategy.
Like, You can Iron condor is a limited risk strategy. It’s a basic strategy, and you can create by selling one OTM Call & OTM Put and buying further OTM Call & Put. You will get profit if your script expires in a range, which happens most of the time.
But instead of just deploy this strategy, you have to understand why you are making money in that particular range. What are the factors (Like premium, greeks, IV, etc.) which help to make money in that specific range?
If you know the basics of that particular strategy, you can easily optimize it based on your risk appetite, and if the script is moving against your prediction, you can easily manage that trade. Trade management is essential. Because place a strategy is just one part, you will get your return from how well you are managing your trade.
So instead of just copy someone, try to understand the basics, logics, and the factors behind that trade and optimize it based on your risk appetite. Every successful trader is doing the same. Even I, too, did the same. I learned some strategies from one mentor and some strategies from another mentor. I optimize all the strategy based on my risk appetite, and the results are mind-blowing.
So initially, focus on basics and then try advanced things. If you know the basics of a particular strategy, you can easily manage the trade. And if you can manage that well, you will get your desirable return.
The same thing we are teaching in our Options strategies – A Mentorship Program, We are not just telling you the basic theory, we are providing handholding support in the real market so that you can optimize your strategy and can learn how to manage a trade well.
Nifty weekly analysis with Weekly options strategy
I have drawn a Fibonacci retracement tool on the weekly chart of Nifty. You can see that 9650 is the 50% retracement level, and 10300 is the 61.8% retracement level. If you are drawing this tool on different High/Lows, you will find that most of the time, this 50% – 61.8% zone is acting as a reversal zone.
So any long trade should only valid after a successful breakout from 10300. and till nifty is trading below 9650, every upside movement should be a sell-on-rise opportunity.
As per the current chart, 9000 – 9650 is the range for the coming week. Breakout from 9650 will give an entry in the No-trade zone. Below 9000 we may get some more downside levels.
Nifty weekly Options Chain analysis
Based on option chain data, the highest Open interest stands at 9500 CE & 9200 PE, followed by 9600 CE & 9300 PE. PCR of all strikes is 1.15, which indicates a neutral market. PCR at 9200 stands at 10, which is acting as an immediate support level.
The Put-call ratio at 9500 stands at 0.35, which is acting as a resistance level. Equally, important indicator Option Pain is at 9400, indicating weekly expiry at 9400. A shift in option pain will provide further levels of expiry. So keep tracking max pain.
Significant open interest buildup on both the side, especially 9000 PE, 9200 PE, 9400 and 9500 CE & 9600 CE. So based on the OI, the possible range for this week should be 9200 – 9600.
Keep tracking open interest to analyze market participant’s behavior. If you don’t know how to analyze open interest for weekly option hedging strategies. Just enroll for our Option Strategies – A Mentorship Program.
Nifty weekly Options Strategy: Iron Condor
Initially, you can keep a stop loss of 9620 & 9175 for this strategy. Means square off if you find nifty is giving a breakout or breakdown. Or you can do this adjustment too.
If you find that Nifty is giving a breakdown and sustaining below 8950, then square off call spread and bring it down to 300 points lower levels and convert this strategy into an iron butterfly.
The same thing you can do with put spread means if you got a breakout from 9550. You can shift your put spread to 300 points up.
Weekly Analysis with Bank Nifty weekly options strategy
We saw a very good rally due to short covering in Bank nifty this week. If you look at the chart, You will find that despite of this huge volatility, still Bank Nifty is trading in a range.
Based on the chart, 18000 – 20700 is the current range. Above 20700, banknifty can hit 23000 and below 18000, we may see 16000.
Right now there is no clear indication of any buy/sell trade for short to medium term. But this is the time to invest for the long term. Pick some good quality stocks (like HDFCBANK) in the banking sector and invest for the long term.
This is the best time to trade with some limited risk range-bound strategies. So focus more on range-bound strategies.
Bank Nifty Weekly options chain analysis
Based on option chain data, the highest Open interest stands at 20000 CE & 18000 PE, followed by 19500 CE & 19000 PE. PCR of all strikes is 1.23, which indicates a slightly overbought market. PCR at 19000 stands at 5.16, which is acting as an immediate support level.
The Put-call ratio at 195000 stands at 0.1, which is acting as a resistance level. Equally, important indicator Option Pain is at 19000, indicating weekly expiry at 19000. A shift in option pain will provide further levels.
Remember one thing: When IV is high, data can change anytime so keep following more closely.
If you don’t know how to analyze open interest. Just enroll for our Option Strategies – A Mentorship Program.
Bank Nifty Weekly Options Strategy: Iron Condor
If you find that BankNifty gives a breakdown and sustaining below 18000, then Shift your Call spread to 1000 points down.
The same thing you can do with put spread means if you got a breakout from 20000. You can shift your put spread to 1000 points up.
If you want to learn these bank nifty weekly options strategy and their adjustments in more practical ways with live mentorship, You can enroll in our Option Strategies – A Mentorship Program(33% OFF).
Much Check this also– Performance of the Option strategies, Nifty & BankNifty Weekly Options strategy, Nifty Option Strategy for Budget Session, A low-risk options strategy in LICHSGFIN, An iron condor options strategy in ICICIBANK, Reverse Jade Lizard options strategy in UPL, A high probability options strategy in YESBANK
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*( Please avoid any question like which Call or Put we should buy in the coming week).
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DISCLAIMER: – we are not a SEBI research analyst. Views or the nifty and bank nifty weekly options strategy 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.