Put Back Spread
Yesterday We had recommended to buy 2 lots Nifty OTM put and sell 1 lot ITM put. Here is the pay off chart.
This strategy is a bearish strategy. Lower side break even is around 4671 and if Nifty expires above 4920 maximum loss is 29 points. However if market starts sliding further down we will be earning good amount of profit. If Nifty expires around then we will incur maximum loss of 126 points.
This strategy is recommended because if we buy put option any surprise in the market can erode the capital. However if more bad news flows into market (like rupee depreciation) we may witness further fall.
Yesterday We had recommended to buy 2 lots Nifty OTM put and sell 1 lot ITM put. Here is the pay off chart.
This strategy is a bearish strategy. Lower side break even is around 4671 and if Nifty expires above 4920 maximum loss is 29 points. However if market starts sliding further down we will be earning good amount of profit. If Nifty expires around then we will incur maximum loss of 126 points.
This strategy is recommended because if we buy put option any surprise in the market can erode the capital. However if more bad news flows into market (like rupee depreciation) we may witness further fall.
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