Options Strategy
Long Straddle - Nifty 50
Buy an ATM call and an ATM put at the same strike and expiry. You profit if Nifty makes a large move in either direction. The trade loses only when Nifty stays flat and both options expire near worthless.
Leg 1 — BUY Call
24,000 CE
Pay premium: ₹350
Leg 2 — BUY Put
24,000 PE
Pay premium: ₹340
Total cost
₹51,750
Max loss (per lot)
Upper breakeven
24,690
Strike + total premium
Lower breakeven
23,310
Strike − total premium
Max profit
Unlimited
Either direction
Adjust your trade parameters
Big rally (above upper BE)
Call profits far exceed put loss. Every extra point = ₹75 gain per lot.
Flat market (between BEs)
Neither option pays enough. Max loss at the strike where both expire near zero.
Big fall (below lower BE)
Put profits far exceed call loss. Every extra point down = ₹75 gain per lot.
Best event plays on Nifty
RBI policy day
Rate decisions often trigger sharp moves. Buy the straddle 1–2 days before and exit after the announcement.
Union Budget
One of the highest IV days of the year. The straddle can double if the budget triggers a surprise rally or sell-off.
F&O expiry week
Monthly expiry often sees sharp directional moves as large positions get unwound across the market.
Long Straddle vs Long Strangle: A straddle buys both options at the same ATM strike, higher cost, lower breakeven distance. A strangle buys OTM options on both sides ,cheaper but needs a bigger move to profit. Use the straddle when you expect a sharp move around a specific event.
How to execute on NSE
1
Identify an upcoming event — RBI policy, budget, earnings where a big move is likely but direction is uncertain.
2
Select the ATM strike closest to current Nifty spot for both legs. Same strike, same expiry.
3
BUY the Call and BUY the Put simultaneously. Total debit = Call premium + Put premium × 75.
4
Exit both legs together once the event occurs — do not hold too long after, as IV crush will rapidly erode value.
5
If one leg is deep in profit, consider exiting the losing leg early to reduce ongoing theta bleed.
Key risks to know
IV crush is the biggest enemy: If you buy before an event and implied volatility collapses after the announcement, both options lose value fast — even if Nifty moves. Exit quickly after the trigger.
Time decay (Theta): You are long two options, so theta bleeds from both sides every day. The straddle is expensive to hold for long periods.
Flat market = full loss: If Nifty stays pinned near the strike at expiry, both options expire nearly worthless and you lose the entire premium paid.
High premium near events: ATM premiums inflate sharply before known events due to elevated IV. The move needs to be large enough to overcome this inflated cost.