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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