In case of an unfavourable election outcome, if Nifty corrects by 7-8%, Motilal Oswal recommends a Bear Put Strategy to hedge against the corrective move till 21,000 zones with a hedging cost of 1.50% till the end of June 2024.
Buy 1 lot of 22500 Put @ 470
Sell 1 lot of 21000 Put @ 120
Margin Required: Approx. Rs 20,000/-
Net Premium Paid: 350 Points
Max Risk: 350 Points (Rs. 8,750/-) if Nifty moves higher
Max Reward: 1150 Points (Rs. 28,750/-) if Nifty goes below 21000 zones
Risk: Reward: 1 : 3.28
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
