Trading the Dip: My Nifty Options Setup for This Gap Down Market

Jul 31

Hello Traders!
Hope you all are doing good.
Today Nifty opened with a significant gap down. The reason? Fresh news about the US under Donald Trump’s policy imposing a 25% tariff on Indian goods. This triggered panic among investors, and we saw aggressive selling at the open.

But I believe this reaction could be short-lived. Local DIIs have been showing strong buying interest every single day, and I expect them to support the market again today. That’s why I’m looking for a potential intraday recovery from lower levels.

So instead of joining the panic, I’m planning a contra trade on Nifty.

Trade Setup: Buying naked Ce with stop loss

• Buy Nifty 7th August 24650 CE, now at 180
  
• Add 1 More lot around 155-160 levels if price dropss
  
• Keep stop loss around 120
  
• Targets will be 210/246/290++
  
  Another Trade Setup: Options writing(selling) with hedging strategyBullish Iron Condor Setup (Neutral-to-Bullish View):
  For traders who prefer risk-defined strategies, I’ve also deployed a bullish iron condor with a limited risk, targeting consolidation or moderate recovery by expiry.
  
  
  • Sell: 2x 25050 CE @ 44.45
    
  • Buy: 2x 25300 CE @ 17.30
    
    
  • Buy: 2x 24550 PE @ 103.60
    
  • Sell: 2x 24800 PE @ 217.95
    
  Note:- All Strike from 7th Aug expiryKey Metrics:
  • Max Profit: 21,225
    
  • Max Loss: 16,275
    
  • Breakeven Range: 24659 to 25191
    
  • Max RR Ratio: 1:1.3
    
  • Margin Required: ~2 lakhs Rs.
    
  
  
  The idea here is to stay profitable if Nifty consolidates or mildly recovers over the next few sessions. If there’s no deep fall or sharp rally, this setup will benefit from theta decay and defined movement.
  
  Risk Management Notes:
  • Strict stop loss is a must. Do not hold beyond SL under any condition
  • This is a contra trade, so avoid heavy positions
  • Recommended quantity: 1 or 3 lots only
  Rahul Tip:
  Market reacts fast to global headlines, but strong hands don’t panic. If your view is backed by logic and risk is managed, sometimes going against the crowd gives the best opportunities.
  
  Conclusion:
  The dip was sharp, but the reaction might be overdone. Let’s watch for signs of intraday strength. If buyers step in, this call option trade can work out well. Trade light, and trade with discipline.
  
  Disclaimer: This idea is for educational purposes only. Do your own research before taking any trade.

Jul 31

Trade active

What a move guy's nifty has given a perfect move as expected, our nifty 24650 ce call option risen 180 to 250, and hit our 1st and 2nd Targets. More has to come on the way. Enjoy profitable analysis.

Jul 31

Trade closed: target reached

Nifty has given a strong move today. Our targets for 24650 CE have been achieved successfully, with the option making a high around 301.
The hedging trade (Iron Condor) is also performing well and currently in good profit.

I suggest booking profits in the option buying position now.
You may continue to hold the Iron Condor if you're comfortable.

Thanks & trade safe!