Nifty 50 Trading Strategy: Analysts suggest Bear Put Spread options strategy for 3 April expiry

The Indian stock market witnessed a strong rebound on Thursday, with benchmark indices Sensex and Nifty 50 rising over half a percent each despite negative global cues. The Nifty 50 index reclaimed the 23,600 level, recovering from the sharp decline observed in the previous session.

Among the Nifty 50 constituents, Hero MotoCorp, Larsen & Toubro (L&T), HDFC Bank, Wipro, and Bajaj Finance emerged as the top gainers.

On Tuesday, the Nifty 50 index had closed 182 points lower at 23,487, amid intensified selling pressure. On the daily chart, the index formed a strong bearish candle with a lower high-low structure, closing below the previous session’s low—indicating continued weakness.

Nifty March Rollover Trends

As per Axis Securities, the Nifty March rollover stood at 61.9% on Wednesday, compared to 62.5% during the previous expiry. This figure is slightly lower than the three-month average of 62.7% and the six-month average of 62%, suggesting a marginal decline in rollover activity compared to historical trends.

Nifty Option Highlights

In the options market, the highest Call Open Interest (OI) is concentrated at the 23,800 strike, followed by 23,700 and 23,500, which are likely to act as resistance levels. Meanwhile, on the Put side, the highest OI is observed at 23,500, followed by 23,200, which may serve as support levels.

Axis Securities further highlighted that the At-the-Money (ATM) option premium is ₹358, implying a likely trading range of 23,100 to 23,900 for the week.

Nifty Options Strategy for 3 April 2025 Expiry

Recommended Strategy: Bear Put Spread

Axis Securities has suggested a Bear Put Spread strategy for Nifty contracts expiring on 3 April 2025, reflecting a moderately bearish outlook.

A Bear Put Spread involves buying a higher strike Put option and simultaneously selling a lower strike Put option to offset part of the upfront cost. This strategy is characterized by limited risk and limited profit potential, making it suitable for traders anticipating a moderate decline in the underlying Nifty 50 index.

Strategy Details

Buy Nifty 23,400 Put @ ₹90 - 100

Sell Nifty 23,200 Put @ ₹50 - 70

Breakeven Point: 23,358

Under this strategy, one lot of the 23,400 strike Put is purchased, while one lot of the 23,200 strike Put is sold.

Risk-Reward Analysis

According to analysts at Axis Securities, the potential maximum risk for this strategy is ₹3,150, whereas the potential maximum reward is ₹11,850.

Traders looking for a structured approach to capture moderate downside movement while keeping risks controlled may consider 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.