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Mid Market Report, July 7, 2014

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July 07, 2014
2 comments
July 7, 2014
Time: 12 15 pm

Mid Market Report:


  1. Markets are consolidating ahead of key events.
  2. This is a calm before storm.
  3. Bank Nifty has given up some gains made on Friday afternoon.
  4. IT, Auto, Pharma indices are up.
  5. Bank and FMCG are down.
  6. India VIX is up by more than 7%.
  7. This is expected ahead of key events.
  8. India VIX is likely to continue to rise until Friday.
  9. Europe futures are down.
  10. US futures are also slightly down.
  11. Nifty future is not likely to close above 7820 today.
  12. At the same time, Nifty future should take support at 7760.



Written By

Options Trader and Trainer

Comments

  1. Nirmal7 July 2014 at 14:11

    Even though many know that volatility will increase ahead of key events, yet India VIX has traded only in single digit contracts. Why is that ?

    ReplyDelete
    Replies
    1. P R Sundar8 July 2014 at 07:47

      India VIX is an illiquid contract for many reasons.
      1. Awareness among investors.
      2. Huge margin money of around Rs 7 lakhs.
      3. No options to hedge the risk.
      4. It is a weekly contract unlike other contracts which are monthly. This increases the cost of carry and other charges.
      5. It is a high risk high reward contract. Not many people can take this kind of risk.
      6. Since this is a recently introduced contract, Technical players will not play in this contract as long term charts are not available.
      Thanks.

      Delete

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