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I purchased Bank Nifty 43000 PE for December 8 expiry at ₹187. What is the conservative target at which I should sell this trade? – Vivek Naidu
The Nifty Bank index is now stuck in the range of 43,000 - 43,350. So, unless either of these levels is breached, we cannot really say in which direction the next leg of trend will be. That said, do note that there is a good chance for the index to stay within these levels for a day or two.
Since you hold a long 43000-strike put option, such consolidation can impact you negatively because of time decay. So, our suggestion is to exit the option now. Consider buying a put option when the index falls below 43,000. A breach of 43,000 can drag the index to 42,250 which you can try to monetise by buying put options. If you’re buying puts, consider buying monthly contracts instead of weekly ones so that you’ll have more time for the price action to play out.
Send your queries to derivatives@thehindu.co.in
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