21 May 2025 : Strategy Suggestions (22 May Expiry, 25000 CE @ ₹40)

1. Bear Call Spread (Safe Play)

• Sell 24900 CE @ ₹70
• Buy 25000 CE @ ₹40
• Net premium received: ₹30
• Max profit: ₹1,500 per lot
• Max loss: ₹2,000 per lot (if Nifty closes above 25,000)
• Breakeven: 24,930

Why it's good: Decent profit if Nifty stays below 24,900. Lower margin, defined risk.

2. Call Ratio Spread (Better Profit)

• Buy 1 lot 25000 CE @ ₹40
• Sell 2 lots 24900 CE @ ₹70
• Net premium received: ₹100 (70x2 - 40)
• Max profit zone: 24,900–25,000
• Unlimited loss above 25,000 — unless hedged.
• To hedge risk:
• Buy 1 lot 25100 CE @ ₹20
• Net premium after hedge: ₹80
• Max profit: ₹4,000–5,000 if Nifty closes 24,950–25,000
• Max loss capped beyond 25,100

3. Most Profitable Low-risk Trade Right Now:

• Sell 24900 CE @ ₹70
• Buy 25100 CE @ ₹20
• Net premium: ₹50
• Max profit: ₹2,500 per lot
• Max loss: ₹2,500 per lot (if Nifty crosses 25,100)

Why it works: 70-20=50 net received. Risk capped. Profit if Nifty remains under 24,900 by expiry.

Risk-Reward Ratio: 1:1, but high probability (about 63-65%) in your current RSI divergence scenario.

Strategy Reasoning

• The market is showing signs of exhaustion at 25,000–25,100
• Selling call options at this level allows us to capture high premiums while expecting them to expire worthless or depreciate rapidly
• A 25000 CE buy acts as a hedge against a sudden breakout, keeping our risk capped
• The payoff structure favors a range-bound or mildly bearish market before expiry