You are on page 1of 28

Bank Nifty

Options
Strategies

Bank Nifty
Bank Nifty

8900
8800

25

500
9300

Profit, when: Bank Nifty closes above the


strike price on expiry
Bank Nifty

8800

-12500

-12500

9000

-12500

2500

-10000

9200

-12500

10000

- 2500

9400

-12500

15000

2500

-12500

20000

7500

9600

15000

Payoff from Call Brought


10000
5000
Bank NIfty

-15000
-20000

9800

9700

9600

9500

9400

9300

9200

9100

9000

8900

8700

8800

8600

-5000
-10000

8500

0
8400

Loss, when: Bank Nifty closes below the


strike price on expiry

Bullish on Bank Nifty

Example: Sell 1 Call Option*


Bank Nifty

8900
8800

25

400
8400

Profit, when: Bank Nifty does not go down and


option expires unexercised
Bank Nifty

8000

10000

-20000

10000

8200

10000

-15000

5000

8400

10000

-10000

8600

10000

-5000

5000

8800

10000

10000

9000

10000

10000

15000

Payoff from Put Sold


10000
5000
Bank NIfty

-10000
-15000
-20000

9100

9000

8900

8800

8700

8600

8500

8300

8400

8200

-5000

8100

0
8000

Loss, when: Bank Nifty goes down and option


exercised

Bank Nifty

8900

25

ITM Call Strike Price

8700

Call Premium

500

OTM Call Strike Price

9000

Call Premium

400

Break Even

8900

Pay-off from
ITM Call brought

Bank Nifty

Pay-off from
OTM Call Sold

8500

-12500

10000

-2500

8200

-12500

10000

-2500

8400

-10000

10000

8600

-5000

7500

2500

8800

2500

2500

Payoff from Call Brought


Payoff from Call Sold
Net Payoff

15000
10000
5000

-10000
-15000
-20000

9600

9400

9300

9200

9100

9000

8900

8800

8700

8500

8600

8400

8300

8200

-5000

9500

Bank NIfty

Example: Buy 1 ITM Call Option and Sell 1 OTM Call Option*

Bank Nifty

8900
Sell OTM Put Strike Price

8800

Put Premium

25

500

Buy OTM Put Call Strike Price

400

Break Even

9000
Pay-off from
Put purchase

Pay-off from
Put sold

Bank Nifty

8500

Put Premium

8600

-5000

-5000

8800

5000

-10000

-5000

9000

10000

-10000

9200

12500

-10000

2500

9400

12500

-10000

2500

Payoff from Put Sold


Payoff from Put Brought
Net Payoff

15000
10000
5000

-10000
-15000
-20000

9400

9200

9100

9000

8900

8800

8700

8500

8600

8400

8300

8200

-5000

9300

Bank NIfty

Example: Buy 1 Future and 1 Put Option*

Bank Nifty

Future Price

8900

Strike Price

8800

25
200

Premium

9100

Break Even

Pay-off from
Put option
brought

Pay-off from
Futures Long

Bank Nifty

8600

-7500

-7500

8800

-2500

-5000

-7500

9100

5000

-5000

9200

7500

-5000

2500

9500

15000

-5000

10000

Payoff from Futures Long


Payoff from Put Brought
Net Payoff

15000
10000
5000

-10000
-15000
-20000

9600

9400

9300

9200

9100

9000

8900

8700

8800

8600

8400

8500

-5000

9500

Bank NIfty

Example: Exisiting 1 Long Future and Sell 1 OTM Call Option*

Bank Nifty

25

Spot Price

8900

Future Price

8900

Strike Price

9100
200

Premium

8700

Break Even

Pay-off from
Call sold

Pay-off from
Futures Long

Bank Nifty

8500

-10000

5000

-5000

8600

-7500

5000

-2500

8700

-5000

5000

8800

-2500

5000

2500

5000

5000

8900

Payoff from Futures Long


Payoff from Call Sold
Net Payoff

15000
10000
5000

-10000
-15000
-20000

9600

9400

9300

9200

9100

9000

8900

8800

8700

8500

8600

8400

8200

8300

-5000

9500

Bank Nifty

Example: Buy 1 Future and 1 Put Option Contract


and Sell 1 Call Option Contract*

Bank Nifty

Future Price

8900

Put Strike Price

8800
150

Put Premium

25

9000

Call Strike Price

200

Call Premium
Break Even
Bank Nifty

8850
Pay-off from
Call sold

Pay-off from Pay-off from


Futures Long Put brought

8600

-7500

1250

5000

-1250
-1250

8800

-2500

-3750

5000

8850

-1250

-3750

5000

9000

2500

-3750

2500

3750

9300

10000

-3750

-2500

3750

25000

Payoff from Futures Long


Payoff from Put Brought

20000

Payoff from Call Sold

15000

Net Payoff

10000
5000

-10000
-15000
-20000

9700

9500

9400

9300

9200

9100

9000

8900

8800

8700

8500

8600

8400

8200

8300

-5000

9600

Bank Nifty

Example: Sell 1 OTM Put Option and Buy 1 OTM Call Option*

Bank Nifty

25

Spot Price

8900

Put Strike Price

8800

Put Premium

300

Call Strike Price

9000

Call Premium

400

Break Even

9100

Pay-off from
Call brought

Pay-off from
Put sold

Bank Nifty

8700

5000

-10000

-5000

8900

7500

-10000

-2500

9100

7500

-7500

9300

7500

-2500

5000

9500

7500

2500

10000

20000

Payoff from Put Sold


Payoff from Call Brought
Net Payoff

15000
10000
5000

-10000
-15000
-20000

9700

9500

9400

9300

9200

9100

9000

8900

8800

8700

8500

8600

8400

8300

-5000

9600

Bank Nifty

Example: Buy 1 Put Option*

Bank Nifty

25

Spot Price

8900

Strike Price

8800

Premium

400

Break Even

8400

Pay-off from

Pay-off from

Bank Nifty

8000

-10000

20000

10000

8200

-10000

15000

5000

8400

-10000

10000

8600

-10000

5000

-5000

8800

-10000

-10000

9000

-10000

-10000

15000

Payoff from Put Brought

10000
5000

-10000
-15000
-20000

9100

8900

8800

8700

8600

8500

8400

8200

8300

8100

8000

-5000

9000

Bank Nifty

Example: Sell 1 Call Option*

Bank Nifty

Spot Price

8900

Strike Price

8800

25
500

Premium

9300

Break Even

Exercise
Pay-off

Premium
Pay-off

Bank Nifty

8800

12500

12500

9000

12500

-2500

10000

9200

12500

-10000

2500

9400

12500

-15000

-2500

9600

12500

-20000

-7500

15000

Payoff from Call Sold

10000
5000

-15000
-20000

9800

9600

9500

9400

9300

9200

9100

9000

8900

8800

8700

8500

8600

8400

-5000
-10000

9700

Bank Nifty

Example: Sell 1 ITM Call Option and Buy 1 OTM Call Option*

Bank Nifty

25

Spot Price

8900

Sell ITM Call Strike Price

8800

Call Premium

500

Buy OTM Call Strike Price

9000

Call Premium

400

Break Even

8900

Pay-off from
OTM Call Brought

Pay-off from
ITM Call Sold

Bank Nifty
8500

12500

-10000

2500

8700

12500

-10000

2500

8900

10000

-10000

9100

5000

-7500

-2500

9300

-2500

-2500

Payoff from Call Sold


Payoff from Call Brought
Net Payoff

15000
10000
5000

-15000
-20000

9600

9400

9300

9200

9100

9000

8900

8800

8700

8500

8600

8400

8300

8200

-5000
-10000

9500

Bank Nifty

Example: Buy 1 ITM Put Option and Sell 1 OTM Put Option*

Bank Nifty

25

Spot Price

8900

Buy ITM Call Strike Price

9100

Puf Premium

500

Sell OTM Put Strike Price

8800

Put Premium

400

Break Even

9000

Pay-off from
ITM Put brought

Bank Nifty

Pay-off from
OTM Put sold

8600

5000

5000

8800

-5000

10000

5000

9000

-10000

10000

9200

-12500

10000

-2500

9400

-12500

10000

-2500

Payoff from Put Brought


Payoff from Put Sold
Net Payoff

15000
10000
5000

-10000
-15000
-20000

9600

9400

9300

9200

9100

9000

8900

8800

8700

8500

8600

8400

8300

8200

-5000

9500

Bank Nifty

Example: Buy 1 ITM Put Option and Sell 1 OTM Put Option*

Bank Nifty

25

Future Price

8900

Buy Call Strike Price

8900

Call Premium

200

Break Even

8700

Pay-off from
Call brought

Pay-off on
Futures

Bank Nifty
8300

15000

-5000

10000

8500

10000

-5000

5000

8700

5000

-5000

8900

-5000

-5000

9100

-5000

-5000

Payoff from Futures Sold


Payoff from Call Brought
Net Payoff

20000
15000
10000
5000

-15000
-20000

9600

9400

9300

9200

9100

9000

8900

8800

8700

8500

8600

8400

8300

8200

-5000
-10000

9500

Bank Nifty

Example: Sell 1 Futures and Sell 1 Put Option*

Bank Nifty

25

Future Price

8900

Put Call Strike Price

8800

Put Premium

200

Break Even

9100
Pay-off from
Put sold

Pay-off from
Futures

Bank Nifty
8500

10000

-2500

7500

8700

5000

2500

7500

8900

5000

5000

9100

-5000

5000

9300

-10000

5000

-5000

9500

-15000

5000

-10000

Payoff from Futures Sold


Payoff from Put Sold
Net Payoff

20000
15000
10000
5000

-15000
-20000

9600

9400

9300

9200

9100

9000

8900

8800

8700

8500

8600

8400

8300

8200

-5000
-10000

9500

Bank Nifty

Example: Buy 1 Call and Buy 1 Put Option at same strike

Bank Nifty

25

Spot Price

8900

Call and Put Strike Price

9000

Call Premium

100

Put Premium

200

Upper BEP

9300

Lower BEP

8700
Pay-off from
Put sold

Pay-off from
Call brought

Bank Nifty
8300

-2500

12500

10000

8500

-2500

7500

5000

8700

-2500

2500

0.00

9000

-2500

-5000

-7500

9300

5000

-5000

0.00

9600

12500

-5000

7500

10000

22500

-5000

17500

20000

Payoff from Call Brought


Payoff from Put Brought
Net Payoff

15000
10000
5000

-15000
-20000

9600

9400

9300

9200

9100

9000

8900

8800

8700

8500

8600

8400

8300

8200

-5000
-10000

9500

Bank Nifty

Example: Buy 1 Call and Buy 1 Put Option at same strike

Bank Nifty

25

Spot Price

8900

Call and Put Strike Price

9000

Call Premium

100

Put Premium

200

Upper BEP

9300

Lower BEP

8700
Pay-off from
Put sold

Pay-off from
Call brought

Bank Nifty
8000

2500

-20000

-17500

8400

2500

-10000

-7500

8700

2500

-2500

9000

2500

5000

7500

9300

-5000

5000

9600

-12500

5000

-7500

10000

-22500

5000

-17500

Payoff from Call Sold


Payoff from Put Sold
Net Payoff

10000
5000

-10000
-15000
-20000

9600

9400

9300

9200

9100

9000

8900

8800

8700

8500

8600

8400

8300

8200

-5000

9500

Bank Nifty

Example: Buy 1 Call and Buy 1 Put Option at different strike

Bank Nifty

25

Spot Price

8900

Call Strike Price

9000

Call Premium

200

Put Strike Price

8800
100

Put Premium
Upper BEP

9300

Lower BEP

8500
Pay-off from
Put purchase

Pay-off from
Call purchase

Bank Nifty
8000

-5000

17500

12500

8300

-5000

10000

5000

8500

-5000

5000

9000

-5000

-2500

-7500

9300

2500

-2500

9500

7500

-2500

5000

9800

15000

-2500

12500

Payoff from Call brought


Payoff from Put brought
Net Payoff

15000
10000
5000

-10000
-15000
-20000

9600

9400

9300

9200

9100

9000

8900

8800

8700

8500

8600

8400

8300

8200

9500

Bank Nifty

0
-5000

Example: Sell 1 Call and Sell 1 Put Option at different strike

Bank Nifty

25

Spot Price

8900

Call Strike Price

9000

Call Premium

200

Put Strike Price

8800
100

Put Premium
Upper BEP

9300

Lower BEP

8500
Pay-off from
Put sold

Pay-off from
Call sold

Bank Nifty
8000

5000

-17500

-12500

8300

5000

-10000

-5000

8500

5000

-5000

9000

5000

2500

7500

-2500

2500

9500

-7500

2500

-5000

9800

-15000

2500

-12500

9300

Payoff from Call brought


Payoff from Put brought
Net Payoff

15000
10000
5000

-10000
-15000
-20000

9600

9400

9300

9200

9100

9000

8900

8800

8700

8500

8600

8400

8300

8200

9500

Bank Nifty

0
-5000

Spot Price
Sell ATM Call Strike
Call Premium
Buy ITM Call Strike
Call Premium
Buy OTM Call Strike
Call Premium
Upper BEP
Lower BEP

Bank Nifty

25

Pay-off from
1 ITM Call
brought

Bank Nifty

8600
8700
8800
8900
9000
9100
9200

Pay-off from
2 ATM Calls
Sold

-12500
-12500
-10000
-7500
-5000
-2500
0

8900
8900
300* 2
8700
500
9100
200
9000
8800
Pay-off from
1 OTM Call
brought

15000
15000
15000
15000
10000
5000
0

-5000
-5000
-5000
-5000
-5000
-5000
-2500

Payoff from 1 ITM Call Brought


Payoff from 2 ATM Calls Sold
Payoff from 1 OTM Call Brought
Net Payoff

20000

15000
10000
5000

-15000
-20000

9400

9200

9100

9000

8900

8800

8700

8500

8600

8400

-5000

9300

Bank Nifty

-10000

-2500
-2500
0
2500
0
-2500
-2500

Spot Price
Buy ATM Call Strike
Call Premium
Sell ITM Call Strike
Call Premium
Sell OTM Call Strike
Call Premium
Upper BEP
Lower BEP

Bank Nifty

25

8900
8900
300* 2
8800
500
9100
200
9000
8800

Bank Nifty

8600
8700
8800
8900
9000
9100
9200

12500
12500
10000
7500
5000
2500
0

-15000
-15000
-15000
-15000
-10000
-5000
0

5000
5000
5000
5000
5000
5000
2500

Payoff from 1 ITM Call Sold


Payoff from 2 ATM Calls Brought
Payoff from 1 OTM Call Sold
Net Payoff

15000
10000
5000

-10000
-15000
-20000

9400

9200

9100

9000

8900

8800

8700

8500

8600

8400

-5000

9300

Bank Nifty

2500
2500
0
-2500
0
2500
2500

Bank Nifty

8900
8700
580
8800
520
9000
420
9100
380
9080
8720

25

Bank Nifty

8400
8600
8720
8800
9000
9080
9200
9400

-14500
-14500
-14000
-12000
-7000
-5000
-2000
3000

13000
13000
13000
13000
8000
6000
3000
-2000

-9500
-9500
-9500
-9500
-9500
-9500
-7000
-2000

10500
10500
10500
10500
10500
8500
5500
500

-500
-500
0
2000
2000
0
-500
-500

Payoff from A Brought


Payoff from B Sold
Payoff from C Sold
Payoff from D Brought
Net Payoff

15000
10000
5000

9600

9500

9400

9300

9200

9100

9000

8900

8800

8700

8500

8600

8400

0
-5000
-10000
-15000
-20000

Bank Nifty

Bank Nifty

8900
8700
580
8800
520
9000
420
9100
380
9080
8720

25

Bank Nifty

8400
8600
8720
8800
9000
9080
9200
9400

14500
14500
14000
12000
7000
5000
2000
-3000

-13000
-13000
-13000
-13000
-8000
-6000
-3000
2000

9500
9500
9500
9500
9500
9500
7000
2000

-10500
-10500
-10500
-10500
-10500
-8500
-5500
-500

500
500
0
-2000
-2000
0
500
500

Payoff from A Sold


Payoff from B Brought
Payoff from C Brought
Payoff from D Sold
Net Payoff

20000
15000
10000
5000

9600

9500

9400

9300

9200

9100

9000

8900

8800

8700

8500

8600

8400

0
-5000
-10000
-15000
-20000

Bank Nifty

Example: Buy 1 Call Strike 8800, Sell 1 Call Strike 9200, Buy 1
Put Strike 9200 & Sell Put Strike 8800*

Bank Nifty

8900
400
250

25

500
350

Bank Nifty
brought
8700
8800
8900
9000
9100
9200
9300
9400

brought

-10000
-10000
-7500
-5000
-2500
0.00
2500
5000

6250
6250
6250
6250
6250
6250
3750
1250

6250
8750
8750
8750
8750
8750
8750
8750

0
-2500
-5000
-7500
-10000
-12500
-12500
-12500

2500
2500
2500
2500
2500
2500
2500
2500

Payoff from Call Brought


Payoff from Call Sold
Payoff from Put Brought
Payoff from Put Sold
Net Payoff

12500

7500

2500
Bank Nifty
8200

-7500

-12500

8400

8600

8800

9000

9200

9400

9600

Bank Nifty

8900
523
8800
302

25
9200

638

9200

362
8800

Bank Nifty

brought
8400
8600
8800
9000
9200
9400
9600

13000
13000
13000
8000
3000
-2000
-7000

brought

-7500
-7500
-7500
-7500
-7500
-2500
2500

1000
-4000
-9000
-9000
-9000
-9000
-9000

-4000
1000
6000
11000
16000
16000
16000

2500
2500
2500
2500
2500
2500
2500

Payoff from Call Sold


Payoff from Call Brought
Payoff from Put Sold
Payoff from Put Brought
Net Payoff

16000
12000
8000
4000

Bank Nifty

0
8200

-4000
-8000
-12000
-16000

8400

8600

8800

9000

9200

9400

9600

9800