Algo Strategy : Bull Call Spread is executed when a trader thinks the price underline asset will increase moderately in a range .The trader forgoes a bigger profit by reducing the cost by selling call and receiving premium .
Strategy :
Buy ITM Call
Sell OTM Call
NIFTY 50 Underline : 17320
BUY ITM CALL Strike 17250 : Premium Paid Rs. 140
SELL OTM CALL Strike 17450 : Premium Received Rs. 30
When NIFTY 50 Rise to 17600
BUY CALL = 17600-17250-140 = Rs.210
SELL CALL = 17450-17600+30 = Rs.-120
Net Profit = Rs.90 Maximum Profit
Formula : 17450-17250-140+30 = Rs. 90
When NIFTY 50 Falls to 17100
– BUY ITM CALL Premium Paid + SELL Premium Received = -140 +30 = -110 Loss Maximum Loss
Formula for Maximum Profit : Strike Price of SELL OTM Call – Strike Price of BUY ITM Call -Net Premium-Brokerage
Maximum Profit : When Price of Underline >= Strike Price of Sell Call
Maximum Loss : Premium Paid + Brokerage
Also Riskless ALGO Strategy LONG BOX : Riskless Algo Strategy : Long Box
NSE India Options Chain Website https://www.nseindia.com/option-chain :