![F&O Radar | Deploy Bull Call Spread in Nifty to gain from bullish stance](https://img.etimg.com/thumb/msid-111621153,width-210,height-158,imgsize-765180,resizemode-75/fo-radar-deploy-bull-call-spread-in-nifty-to-gain-from-bullish-stance.jpg)
It closed near the day’s high and gave the highest-ever close with gains of around 110 points. It formed a Bullish candle on a daily frame and follow-up buying is intact.
“Now till it holds above 24200 zones, momentum could extend towards 24,750 and 25,000 zones,” said Chandan Taparia, Senior VP, Equity Derivatives & Technicals, Broking & Distribution at Motilal Oswal.
India VIX is up by 12% from 12.70 to 14.31 levels. Volatility slightly inched higher after cooling off in the entire previous month.
Volatility fell down in the last month but now could see some spike as we head towards Budget 2024, Taparia added.
Option data suggests a broader trading range in between 24,100 to 24,700 zones while an immediate range between 24,200 to 24,600 levels.
“Overall we have a positive to range-bound stance and expect that any small declines could be bought for an upside move towards 24,750-25,000 zones,” says Taparia.
Given such a scenario, Chandan Taparia suggests deploying a Bull Call Spread strategy to get the benefit of a bullish stance without worrying much about theta decay.
Bull Call Spread
A bull call spread is an options trading strategy that uses two call options. It is deployed usually when a trader anticipates a moderate rise in the price of the underlying asset.
![Chart 1 Chart 1](https://img.etimg.com/photo/msid-42031747/et-logo.jpg)
(Prices as of July 9)
Below is the payoff graph for the strategy:
![image 2 image 2](https://img.etimg.com/photo/msid-42031747/et-logo.jpg)
(Source: Motilal Oswal)
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
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Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.
Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price