Pre Market Report, January 23, 2018 | Stocks and Commodities

January 23, 2018
Time: 8.45 am

Pre Market Report:

1. US Govt shutdown averted in the last minute.
2. So US markets closed higher.
3. US Govt. shutdown news was a reason for India VIX shooting by more than 10%.
4. Today I expect India VIX to fall.
5. But this rise in India VIX has given an excellent opportunity for option sellers.
6. Premiums have shot up on both sides.
7. Even SBI 330CE was trading at Rs 0.50, giving 2% return for the Span margin paid, in just three days.
8. IndusINd Bank spot was up by Rs 5 but Future was down by Rs 10. So future is trading Rs 15 discount to Cash that too when expiry is just three days away.
9. Most futures are trading at a discount to cash prices.
10. But option sellers remain too bullish.
11. They unwound 10700, 10600, 10500PEs and increased their positions at 10900.
12. Nifty 10900PE added more than 17 lakh shares in open interest.
13. I have sold 10900, 10800, 10700PEs aggressively yesterday.
14. The profit was not much due to increased volatility but I will make very good profit when VIX falls.
15. I also sold Bank Nifty 26500, 26400, 26300, 26200, 26100, 26000PE and 27500, 28000CE.
16. When the VIX is high, it is the right time to sell options. I am planning to set up "Short Straddle" in both Nifty and Bank Nifty in February series.
17. I am planning to sell 11000CE and PE in Nifty and 27000CE and PE in Bank Nifty.
18. There are no important results today.
19. People may be reluctant to create long positions once Nifty touches 11,000.
20. So markets may consolidate for the next two to three days.
21. I expect some consolidation between 10980 and 11020.
22. Nifty future may trade between 10950 and 11020.