June o6 was the RBI Monetary Policy Day.

Banking Stocks had more volatility because of the anticipated event. RBI announced a 25 bps increase in interest rates at 2:30 pm and it appeared that the market would lose momentum.

For a few minutes it did.

NIFTY was up 70 points and suddenly it was up only 24 points.

With equal alacrity it moved up. Very swiftly indeed. In no time it was up 100 points.

After that there were few small moves either way and NIFTY ended up by 91 points.

Today was about banking and bank NIFTY.

Irrationally our public sector bank stocks gained today. With all their Non Performing Assets, frauds and increased cost these stocks should be going down.

But you and me do not make the market do what it does.

We have to live with whatever is happening and take it on the chin on days like this.

Let us have a look at the NIFTYBANK moves for the day:

See the moves from 2:30 pm to 3:30 pm.

Well, this hit us badly as we hold PUTS in SBIN and PNB.

And here is NIFTY:

It almost mirrored BANKNIFTY.

The bad part is that our 3 Calls did not recover as much they should have in this 90 point up move. The PUTS lost badly.

The profit/loss chart does not look as good as it was looking yesterday.

But it is early days. We can and must wait.

Action for Today :

With US market up for the day we expect our CALLS to do better.

Maybe the banking stocks will give us trouble for another day, we just live with that.

No action suggested except to wait and watch.

All the best for the day.

Disclaimer: This post and examples are for teaching purpose only and are not meant as advice/suggestion to trade in these stocks. Trading in Futures and Options can lead to big losses and should be done with appropriate knowledge and advice only. Mentioning the stocks here does not imply that I have a trading position or likely to take a trade in these stocks.