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Budget Day Moves– How It Happened ?

The day is over. What a roller coaster it was. As the election mode announcements kept coming, there was muted reaction. NIFTY stayed in a range moving a little bit here and there. Then came the proposal about Long Term Capital Gains and the NIFTY tanked. It touched the low point of the day at 10878.80. And did not take much time to recover smartly to go to day's high point of 11117.35. Once the heat of the moment trading was over things cooled down a bit and NIFTY ended the day at 11016.90 almost 100 points down from the high of the day. In three previous years market had closed near to the high point of the day whatever the volatility of the day. Today we saw a move…
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What to do when the strategy works out too soon?

It was only two days ago that I had posted here about trading the Budget Volatility. Union Budget is still to come out but suddenly there was a drop in the Volatility yesterday. Reasons -- I really do not know. And do not care.  It is not for a trader to look for the why? Trader is to live with the How and What. What to do in any situation and how to get a profit out of the trade. This happened yesterday. NIFTY lost 80 points. But due to reduction in VIX ( India Volatility Index) , PUT premiums did not gain at all. PUTS for 11000, 10900 and 10800 in fact lost money. The earlier post was about Selling OTM PUTS and CALLS ( 2 Lots ) and…
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Budget Day Trading through NIFTY Options– February 01, 2018

Union Budget for the financial year 2018-19 will be presented by the Finance Minister on February 01, 2018. Budget days generally see bigger movements of Index compared to other days. Market reacts to each and every announcement as the news flow comes in and then decides the final direction. Sometime the impact continues for few days and at other time it fizzles out and markets are back to doing their own things. For traders, specially Option Traders such volatility has serious implications. High Premiums: As the traders expect higher volatility on budget day and a trend to emerge and continue as a result of the budget presentation, the option premiums are higher than usual. This is additional cost for the option buyers. The volatility will decline after the event and a…
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