The Europe is facing a tough time now, the meeting between the finance ministers of European region is to be held on Wednesday. This meeting will be based on the fact how to address the debt of Greek economy as well as increasing funding limit of EFSF to 2 trillion EURO from its current 440 Billion Euros. So after the outcome of this meeting we will be seeing huge extraordinary movement on stock markets, it may be positive or negative. So for this kind of situation we have a breakout strategy on nifty options. Traders can buy nifty 5300 call option and 4900 put options, both are of November series. Nifty 5300 call options must be bought near 70 and nifty 4900 put option near 50 level. Now on breakout target for this strategy must be total premium of 180. Also traders must exit this options strategy if total premium is below 70. For now the situation is to wait and watch. Also remember the nifty options strategy discussed above is for November expiry. The charts of Dow Jones ind avg. suggest us that this major index is just near its resistance and it is more likely to correct from that level very soon this week. Short term trend in Indian markets will be determined by EU leaders meet on 26 October 2011 Wednesday. Also there may be increase in near term volatility in markets due to F&O expiry tomorrow and also volumes will be lower due to this festive season, when most of the retail traders don’t participate, so one has to be careful now. Tomorrow we have RBI credit policy to be declared and we expect interest rate hike by about 25 bps. So traders can go short on realty stocks such as DLF, HDIL and even some banking stock like SBIN.
Free Nifty Options Strategy (tips): Buy Nifty 4900 put options near 50 level and Buy nifty 5300 Call near 70 level, traders can book profits when total premium becomes 180 and book loss in this strategy when total premium goes below 70. Both of these options are of November expiry.