nifty call put trading strategy

Break out scheme is optimum applied when any important news is to be announced, that bathroom work mountainous movements in markets in either focusing. This scheme uses Bang-up options, both call and put option, traders broadly buy up of money call option and put just before the news is to embody announced.

Breakout Strategy with example:

Let's hire an example, when the results of general election 2009 were to be announced.dannbsp;Nifty was trading about 3900 level, we considered to buy neat 4000 call option and cracking 3800 put options. Term was to execute this strategy with same quantity. Next day when results were publicly declared nifty was trading higher by 5% and shoot the upper circuit in a few minutes of trade. In next few proceedingsdannbsp;cracking future went 9% higher. In that strategy complete (composed) premium at the time of execution was 120 and next trading day we were getting total premium (agiotage from nifty 4000 claim + cracking 3800 order) in excess of 520. Therefore getting much than 4 times reach using this strategy, so the tip is in bloodline markets are lots of events in which life-size moves are expected but direction is non clear, in those cases traders tin can follow out this breakout strategy. The only drawback this strategy has is, if food market gives intermission after the news announcement then you may land up in losses. So it's better to prime the event which isdannbsp;more momentous to the markets.

About Bhaveek Patel

Bhaveek Patel is one of the most successful traders, technical analyst, and investor, his areas of interest include stockpile market, forex, and gold trading. Apart from this, he is often seen in the golf game course. He is having more than 10 years of go through in trading, had placed his first order on 19 June 2006 with IndiaInfoline.