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How we can play a view via option spreads

Condition for doing bull put spread -


  • Index at a support reference

  • Bullish view on index


We can look to deploy Bull Put Spread


i.e we can buy ATM PE and sell ITM PE in a 1:1 ratio

We should be doing strike selection wrt the view. Example - If we have a bullish view with an objective of 51300 and we are at 51000 as ATM strike


We can look to buy 50,000 PE and sell 50,300 PE in a 1:1 ratio. The pay off will show us the risk reward and it would be good if we can get a 1:3 risk reward ratio. An example below in the image.


The reverse of this can be done for a bearish view.


i.e bear call spread, an example below for same.



Incase of any doubt, drop in your question on email / telegram chat.

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