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Post Market Report, January 28, 2016

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January 28, 2016
2 comments
January 28, 2016
Time: 11 pm

Post Market Report:


  1. In the morning I mentioned that there may be some sharp move on either side in the last one hour.
  2. It has happened in the last 30 minutes.
  3. Bank Nifty fell more than 200 points in the last 30 minutes.
  4. Everyday in January series, markets were highly volatile.
  5. In the morning February Bank Nifty future was trading at a discount to January future but in the last minute it was at a premium of about 100 points.
  6. Dr Reddy February future was almost 15 points discount to January future at the end whereas it was at 10 point premium in the morning.
  7. Usually expiry day favors short sellers.
  8. Today no exception.
  9. FIIs have sold for more than 900 crores in Cash market but we can ignore the expiry day selling due to arbitrage funds selling.
  10. Europe opened negative but US futures were trading positive at the time of our markets closing time.
  11. Even now the trend is divergent, Europe is down and US markets are up.
  12. China once again closed lower.
  13. Crude oil shot up by 7%.
  14. So we have to see how Asian markets react tomorrow.
  15. After the markets close, ICICI came with results, NPA is higher and it may come under pressure tomorrow.
  16. Maruti came out with decent set of results which may react positively tomorrow.
  17. Let us hope that the volatility is less in February. 



Written By

Options Trader and Trainer

Comments

  1. greatearth29 January 2016 at 01:43

    Sir what is mean by arbitrage fund selling?

    ReplyDelete
    Replies
    1. P R Sundar29 January 2016 at 08:37

      There are people who want risk free return even if the return is less. So what these arbitrage funds do, see the difference between cash price and futures price. If the difference is considerable, then they will buy the shares and sell futures. So the risk is zero. But future price will be higher and cash price will be lower. AT the end of the expiry, both will converge, then they will the shares and buy futures for the same price. The difference become their profit. You do not have to pay margin money for selling as you have cash underlying. This is called 'cross margin' facility. Anyway if you want you can actually pledge the shares and get limit and use that to capture any trading opportunity along the way. SO your money is always getting some risk free return.

      Usually these funds will be selling shares in huge quantities and that is why markets move violently on the expiry day.

      Delete

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