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Pre Market Report, October 27, 2015

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October 27, 2015
2 comments
October 27, 2015
Time: 8.45 am

Pre Market Report:


  1. US markets closed marginally lower.
  2. Our markets come under selling pressure at higher levels.
  3. Global cues did not help our markets.
  4. Yesterday Nifty opened above 8350 but fell nearly 100 points.
  5. Today we are likley to open marginally lower.
  6. SGX Nifty is trading at 8240.
  7. But who knows, today we may close higher at the end of the day.
  8. Markets movement is very difficult to predict just few days before expiry.
  9. Yesterday 8200 Put added open interest.
  10. Option sellers want Nifty to expire between 8150 and 8350.
  11. PSU Banks are weak, so Bank Nifty is under pressure.
  12. Axis Bank and Maruti fell intraday ahead of their results today.
  13. Usually all stocks fell just after the results except few shares like Reliance and Bajaj Auto which heve declared excellent results.
  14. So we can expect the same in Axis Bank and Maruti.
  15. But Maruti may come out with excellent results.
  16. Both the stocks have run up in the last one month.
  17. Though some people say Fed meeting is the reason for weakness in the market, I do not agree.
  18. This time fed meeting is a non event as there is no press meet scheduled after the meeting.
  19. So is purely expiry related issues that are dragging the markets.
  20. Most technical people say 8200 - 8300 is a no trade zone.
  21. Markets are expected to be volatile within a range 8200-8300.
  22. Today Nifty future is expected to trade between 8220 and 8320.
  23. We sold 8400 Call options at about Rs 5 per share in order to pocket the premium. Nifty is not likely to expire above 8400.



Written By

Options Trader and Trainer

Comments

  1. Unknown27 October 2015 at 14:01

    If 8217 is protected, closing anywhere near 8236-8248 will invite huge short covering rally in next 2 days .. Either unbelievable expiry or usual option writers expiry between 8298 or 8211

    ReplyDelete
    Replies
    1. P R Sundar27 October 2015 at 16:25

      Hi,
      I have positions in Nifty 8150 Put, 8100 Put and 8400 Call. I face the markets as it moves. Normally I do not worry too much about technicals. Say for example, yesterday after 3 pm I felt markets were bearish and sold 8400 Call at Rs 5, today it closed at Rs 1.80, I can always put stop loss at Rs 4 when the markets shoot up. Even if markets shoot up, due to time value and Volatility value (Note: Today VIX fell), the price of 8400 Call may not go beyond Rs 4. So I worry more about VIX rather than Technicals. Today Nifty has actually fell by 28 points, but look at Nifty November series 7700 Put and 7600 Put, instead of going up, they actually fell. The reason is the VIX.

      So what I mean to say, you can make good money being a VIX trader than Technical trader. Technicals are used to capture the big trends whereas VIX traders capture small moves. Look at Bank Nifty November series 16000 Put and 19500 Call, both fell by Rs 5. So here your risk is very very low compared to technical trader strategies.

      Sine you do not take directional view, you can invest any amount of money which is very difficult in other methods as all other methods take directional view.

      Thanks.

      - P R Sundar

      Delete

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