THE BIG DAY: ELECTIONS RESULTS- Our Magic Options Strategy With Minimum Risk & Maximum Returns

16^th of May is the D Day. The elections results for 2014 general elections are going to be out.   This will pave way of the next government.

The entire nation and specially the markets will keenly follow the election results. We all very well remember what the market reaction last time results were declared was.

Most exit polls have sung to the common tune of ab ki bar modi sarkar this time. The exit polls have signaled a positive outing for the NDA . The projections from channels vary from 250 odd to about 340. What is important to watch out is will NDA be able to achieve the magic figure of 272 or get to a close distance of it.  On the other hand we also know that exit polls can go way off the mark too ( last general elections exit polls most agencies got it way to wrong).

So expecting a volatile movement in the markets, we all know at least that the market may not stay at the same levels after elections. How to maximize the gains with a minimum calculated risk potential?

Apart from our advanced trading systems & advisory Powertrade have always endeavored to think out of the box an provide innovative investing & trading ideas (Our long time readers will recall our strategy of covered investing ,when we advised investors to go long in NIFTY ETF 6200 levels then http://powertrades.blogspot.in/2013/11/investment-or-trading-in-markets-at.html)

So lets have a plan to gain in the markets this elections.

Based on the exit polls we want to go Long in NIFTY, yet don’t want to loose if markets crack right?

First an analysis of NIFTY Levels

Nifty Has resistance at 7200 and a long term break out can be achieved above 7500 , where markets can even hit 7900-8000 zones in next sessions if that level is cleared

Similarly Nifty has critical support at 6900 levels and a any indication that NDA may fall short of the magic levels will mean a blood bath in the markets.

So here is our magic strategy to trade based on those two levels (7500 on upside & 6900 on downside)

Type	Strike	Quantity
NIFTY CE Long	7200 CE	100
NIFTY CE Short	6900 CE	50

Strategy Risk Reward:

·         Gain if NIFTY reaches 8000: 23,566 INR Per Lot

·         Loss below 6900 (any level): -1640 INR Per Lot

This strategy is based on the premise that markets will react either way and will not stay at these levels and we want to be sure that we don’t lose if it falls

Alternate Long Only Strategy:

This is an alternate strategy for players who want to earn on either side by  and are expecting a big move in line with what happened after last elections. This strategy is also a long only strategy

Type	Strike	Quantity
NIFTY CE Long	7200 CE	50
NIFTY PE Long	6800 CE	50

Strategy Risk Reward:

·         Gain if NIFTY reaches 8000: 20,461 INR Per Lot

·         Gain if NIFTY Reaches 6300: 10,135  INR Per Lot