Considering upside momentum, the upcoming week can be approached with a low-risk strategy like Modified Call Butterfly in Nifty.
At the beginning of July series Nifty future OI at 1.28 crore shares is still far lower compared to the last 15-year average OI of 2.2 crore shares.
Rupee value is expected to appreciate from hereon.
Considering the mild bullish mood, the upcoming week can be approached with a low-risk strategy like Modified Call Butterfly in Nifty, said Shubham Agarwal
With Options we can take each bargain hunting trade and not miss on any opportunity due to risk of losing a lot
One of Benjamin Graham’s most useful illustrations is the personification of the stock market as “Mr. Market”. Mr. Market, an imaginary friend or business associate to every investor, offers daily prices for shares in a business.
Spotting price points is not so easy but this indicator created from options premium data gives us decent indications that the mood of the market is changing
Cement company valuations have bottomed out near the current levels over the past six-seven years but there is no visibility for the margins to improve in the near term
Views are divided but it is highly likely that the US Federal Reserve delivers a 75bps hike
Considering the sideways mood, upcoming week can be approached with a low-risk strategy like Call Butterfly in Nifty.
Look at the highest OI strike on Call and Put and you may have a lot of profitable information to sharpen your trade
Market players may look at economic projections to gauge how long Fed will continue to raise interest rate at current pace and what will be its impact on economic growth.
The RBI believes that external balances will still be manageable with some widening in the current account deficit and normal flows of FDI, ECBs, etc.
RBI is likely to follow a nuanced and calibrated approach to rate hikes once its pre-Covid neutral accommodation of 5.15 percent is reached. We expect 40bps rate hike in the upcoming policy meet and expect the RBI raising policy rates to reach 5.15 percent by August/October.
While a mix of Call & Put OTM Vertical Spreads should be executed only when there is absolute dilemma regarding the trend, care should be taken to get out of all spreads if stocks/indices indicate they are getting into a consolidation mode.
"Market debate about central bank monetary policy stance has intensified and we are seeing market players reacting to economic numbers and central bank comments to get more clarity about future stance," says Ravindra Rao, VP - Head Commodity Research at Kotak Securities
Key events in the coming week include manufacturing and services PMI from China, US consumer confidence, and non-farm payrolls report
A Buyer and a Seller of a Futures or Options Contract creates one position. This position is called 1 Open Interest.
Considering the negative momentum, the upcoming week can be approached with a low-risk strategy like modified call butterfly in Nifty.
Export opportunities in agrochemical companies, industrial components are likely to find sustained earnings growth over the long-to-medium term.
Commodities attempted some recovery this week but there is still uncertainty if this trend can continue. The dollar is off the highs but may continue to be supported by US Fed's hawkish stance. Outlook for China may also remain clouded unless the virus situation comes under control.
Impact of IV is fairly straightforward with Options being priced mathematically. Higher the Premium at a point in time and at price point in the Underlying, Higher will be the IV.
Considering the negative momentum along, upcoming week can be approach with a low-risk strategy like Modified Put Butterfly in Nifty.
Overall, risk sentiment is quite weak currently and commodities and equities, which were performing quite well for the last few months, have come under selling pressure.
Option premiums do rise or fall with absolutely no change in Price or Time also. This happens when the assumption of risk among option traders, especially option sellers go up.