Weekly Strategy, January Week 5 | Stocks and Commodities

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January 26, 2014
Time: 12.30 pm

Weekly Strategy: Sell Nifty Dec 2014 expiry 4500 Put option.

1. On Friday all emerging markets fell.
2. Tomorrow Nifty is expected to open gap down by 100 points.
3. Volatility will increase ahead of RBI policy and FOMC meeting.
4. So it is actually not a right time to sell options.
5. Again we do not beleive in buying options.
6. Though markets may fall or become very volatile in the short term, in the long term it looks our markets will do well.
7. Three independent opinion polls say that BJP will form next govt. which will be stable.
8. Both IMF and world bank increased growth forecast for both Indian and Global economic growth.
9. So we are suggesting to sell Dec. expiry 4500 put option which closed at Rs 61 yesterday.
10. But tomorrow it will trade above 65 as the market is expected to fall significantly.
11. This will give a return of over 30%.