Bank Nifty Trading Strategy: Analysts suggest Iron Butterfly options strategy for 27 March expiry | Stock Market News
The Bank Nifty index traded higher on Tuesday, driven by gains in key banking stocks, including ICICI Bank, Axis Bank, and HDFC Bank. The index surged 0.7%, surpassing the 48,700 level and extending its positive momentum from the previous session.
Technical Analysis
Market analysts indicate that if the Bank Nifty index sustains above the 48,250 zone, it may continue its upward movement towards 48,500 and subsequently 48,750 levels. On the downside, key support levels are identified at 48,250 and 48,000.
According to Axis Securities, the highest Open Interest (OI) concentration on the Call side is observed at the 49,000 strike, with additional resistance levels at 49,500 and 50,000. On the Put side, significant Open Interest is seen at the 48,000 strike, followed by 47,500 and 47,000, which are expected to act as support levels.
The At-The-Money (ATM) combined options premium currently stands at ₹950, indicating a likely trading range between 47,300 and 49,500, as per Axis Securities.
Bank Nifty Options Strategy for 27 March 2025 Expiry
Recommended Strategy: Iron Butterfly
Axis Securities has recommended an Iron Butterfly options strategy for Bank Nifty contracts expiring on 27 March 2025. This strategy is best suited for a range-bound market with low volatility expectations.
An Iron Butterfly is a neutral options strategy that involves selling an at-the-money (ATM) straddle while purchasing out-of-the-money (OTM) wings to cap potential risk.
Strategy Details:
Sell Bank Nifty 48,400 Call @ ₹490 – 500
Sell Bank Nifty 48,400 Put @ ₹450 – 470
Buy Bank Nifty 49,500 Call @ ₹90 – 110
Buy Bank Nifty 47,300 Put @ ₹110 – 120
Lower Break-Even Point: 47,660
Upper Break-Even Point: 49,140
According to analysts at Axis Securities, the potential risk in value is ₹10,800, while the potential reward stands at ₹22,200.
Traders and investors are advised to closely monitor market movements and adhere to risk management principles while implementing this strategy.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
