Nifty 50 Trading Strategy: Analysts recommend Bull Call Spread options strategy for 31 July expiry

Mint

5 days ago

The Indian stock market traded sharply lower on Thursday, reversing previous sessions' gains, dragged by heavy selling in IT, FMCG, realty and banking stocks. The benchmark Sensex slumped over 600 points, while the Nifty 50 was down over half a percent, holding above the 25,000 level.
Nestle India, Trend, Shriram Finance, Tech Mahindra, NTPC and HCL Technologies were the top losers among the Nifty 50 constituents.
In the previous session, the equity market witnessed strong gains, and the Nifty 50 closed above 25,200 level. The Sensex surged 539.83 points, or 0.66%, to close at 82,726.64, while the Nifty 50 settled 159.00 points, or 0.63%, higher at 25,219.90.
The highest Nifty Open Interest (OI) on the Call side is at the 25,500 strike, followed by 25,200 which could act as resistance levels. On the Put side, the highest Open Interest is at 25,000, followed by 25,200 which may serve as support levels, according to Axis Securities.
The premium for the At-the-Money option is ₹ 266, indicating a likely trading range for the week between 24,900 and 25,500, it added.
Axis Securities has suggested a Bull Call Spread strategy for Nifty options contracts expiring on 31 July 2025, forecasting a moderately bullish view.
A bull call spread strategy involves buying a call option with a strike price slightly lower than current market price of the underlying asset, which is Nifty 50, and simultaneously selling another call option with a higher strike price (out-of-the-money), both with the same expiration date. This strategy is applied when the outlook is moderately bullish.
Buy Nifty 1 lot 25,200 Call at ₹ 145 - 165
Sell Nifty 1 lot 25,450 Call at ₹ 45 - 65
The strategy involves buying one lot of the 25,200 strike Call Option and simultaneously selling one lot of the 25,450 strike Call Option, said the brokerage firm.
As per Axis Securities, the potential maximum risk involved in this strategy is ₹ 7,350, whereas the potential maximum reward is ₹ 11,400.
'Traders may consider deploying this spread strategy to achieve moderate returns while maintaining controlled risk and reward,' Axis Securities said.
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.