HSL Prime Research - NIfty Short Ircon Condor Strategy (18 August Expiry)

Nifty rallied more than 1000 points from July lows and now reached near resistance of 24700-24800. After sharp rally, we expect Nifty to consolidate within narrow range. In the option segment, significant call writing activity was observed at the 24700-24800 level, indicating strong resistance around those levels, while put writing at 24300-24500 suggests strong support around those levels. Therefore, we recommend short Iron condor strategy based on our view that NIFTY will remain in a consolidation phase, likely to trade within a range of 24300-24800 till 18-Aug expiry.

Action to be taken

• A bear call spread (selling the 24700 CE and buying the 24800 CE)
• A bull put spread (selling the 24400 PE and buying the 24300 PE)
• Max Profit : Rs 4160
• Max Loss :   Rs 2340
• Breakeven points: 24336-24764
• Risk Reward Ratio: 1:1.78

(Approximate margin payable for the strategy Rs. 72000 (for exact margin, pls consult risk team email or check margin calculator on website)

Please note that the spread position may be exited early depending on the reading of the market.