Nifty Short Strangle Strategy – Expiry 15-May-2025
- 2 min read•
- 1,211•
- Published 18 Dec 2025
Recommended Strategy
Here are the key details of the strategy:
Strategy | Nifty Short Strangle |
Expiry | 15-May-2025 |
Strike Prices | Sell 22,000 Put and Sell 24,900 Call |
Net Premium Inflow | ₹42 |
BEP(s) | 21,958 ; 24,942 |
Stop Loss | ₹80 |
Target | Entire Premium Inflow |
This setup involves selling one lower strike Put and one higher strike Call. The combined premium from both sides totals ₹42. The stop loss is placed at ₹80, and the target is the full premium received.
Expiry Pay-off Chart
The chart below shows how the strategy performs based on where the Nifty ends on expiry day:
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The maximum return is the net premium inflow of ₹42.
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The breakeven points are at 21,958 and 24,942.
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If Nifty remains within 22,000 and 24,900, the strategy retains the entire premium.
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Losses start to appear below 21,958 or above 24,942.
These points help visualise the zone where the structure remains effective.
Rationale
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Geopolitical tensions over the past two days have shifted the volatility regime, with a noticeable rise in India VIX, signaling elevated uncertainty and risk perception.
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The Nifty currently oscillates between 23,800 (support) and 24,600 (resistance). Given the recent rise in volatility, a wider trading range is expected in the coming week.
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On the upside, the rally may be capped near the 24,900 zone, which matches the intermediate high from December 2024.
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On the downside, volatility could pull the index toward 22,900–22,800, which is a gap zone from mid-April and also matches the 61.8% Fibonacci retracement of the move from 21,743 to 24,589.
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Even though Implied Volatility (IV) has risen, the change is likely to be temporary. This situation allows a chance to benefit from Vega and Theta decay using a planned options setup.
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A Short Strangle strategy, with wider, carefully chosen strike prices, is suggested to capture the effect of IV contraction and time decay, while factoring in a wider price range.
Key Takeaway
This Nifty Short Strangle setup is built with the current market volatility and price range in mind. It uses defined strike levels, a stop loss of ₹80, and a target of ₹42, helping structure the trade with a balanced view of risk and reward.
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The peak payoff is the entire premium inflow of ₹42.
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Losses start if Nifty moves below 21,958 or above 24,942.
