Day Trading Stocks & Futures
- Thread starter TraderRavi
- Start date
- Tags banknifty bnf daytrading nifty future
Ur not missing anything. My post meant that there was something fishy since the start of the month as there were very minimal writing opportunities. I don't take bulk position but build it over a course of time (2 days) with gradual increase in profits. If i don't get good mtm my position doesn't build up only. So there is very less speculation.This month there was no positive mtm from the start so no position. Also yesterday was first day of the bnf expiry so there was no time to build the position only.
Last such period came in jan-feb'18 where writing opportunities just disappeared from the market. Important thing is to find a system where the market only guides you away from itself.
Last such period came in jan-feb'18 where writing opportunities just disappeared from the market. Important thing is to find a system where the market only guides you away from itself.
The jokers at ToI keep publishing such garbage:
Is another global financial crisis on the horizon?
https://m.timesofindia.com/business...risis-on-the-horizon/articleshow/65909090.cms
Is another global financial crisis on the horizon?
https://m.timesofindia.com/business...risis-on-the-horizon/articleshow/65909090.cms
Read something interesting and pasting it here
*What happened in the financial debt market leading to a huge sell-off and panic in the Stock Market yesterday?*
A debt fund of DSP Mutual Fund named DSP CREDIT RISK FUND was holding IL&FS commercial Paper (CP).
This paper were rated AAA.
But last week IL&FS made an interest default hence its rating went down to D.
Redemption pressure came to this fund.
Hence DSP MF sold AAA rated 9.1% paper of DHFL as they needed big fund and hence this quality paper was sold at a steep disc.
*Now Post this NBFC Sell Off What is expected ahead ?*
(1) Due to the redemption pressure on DSP Blackrock MF, the fund house had to sell DHFL Bonds at net yield of 11% whereas as per Issue DHFL had yield of 9.1%. This means the Bond was sold at 18% steep discount (Rs.100 bond sold at Rs. 82). After this so many clarifications are coming up by DHFL that it was a secondary market deal wherein they have nothing to do.
(2) Why did DSP Sell?
Ans : Because DSP faced redemption pressure from the Corporate clients holding Funds that have exposure to IL&FS due to downgrade of rating to D from AAA.
This redemption pressure would have resulted in default by DSP and hence they had 2 options :
(a) Either sell GSec
or
(b) Sell DHFL Bonds as investment at a loss.
Now Gsec is already in loss due to Bond yield having risen hence logically if the loss is same it's better to sell Corporate Bonds.
(3) Now hereafter other AMCs having exposure of Rs.2800 crores to IL&FS bonds would get redemption pressure from Corporate clients who have invested in this Rs 16 trillion Debt MF industry. Assuming the avg exposure to IL&FS Bonds as 3% of Gross portfolio this means the value of AUM in such affected funds is Rs. 94,000 Crores. Assuming 25% of such investments are by Corporate Client who do not wish to hold D grade funds the redemption pressure would be a whooping Rs. 23000-24000 Crores.
(4) It's impossible for such schemes to get this amount in a week. Further, illiquid Corporate debt market and DHFL saga results in the fact that AMCs have no option but to sell GSec. Hence, GSec will face a huge selling pressure so either Bond Yield will shoot up to 8.30-8.50% levels or the RBI has to do OMO (Open Market Operations).
(5) If RBI Opts for OMO then the governments spending capacity will reduce by an equal amount and given that elections are around the corner it is impossible for Govt to allow Rs. 24000 Crores out of the system.
(6) The government has only 1 solution: It will have to tell LIC to save IL&FS by ensuring no further defaults specially to Banks and Mutual Funds till elections in order to avoid a financial system crash that will involve a lot of banks, nbfc and Mutual Funds.
(7) At the end of the day public money will be used by LIC to save IL&FS and prevent further defaults.
This will relax the Corporate bond market and stock markets from further panic!
*What happened in the financial debt market leading to a huge sell-off and panic in the Stock Market yesterday?*
A debt fund of DSP Mutual Fund named DSP CREDIT RISK FUND was holding IL&FS commercial Paper (CP).
This paper were rated AAA.
But last week IL&FS made an interest default hence its rating went down to D.
Redemption pressure came to this fund.
Hence DSP MF sold AAA rated 9.1% paper of DHFL as they needed big fund and hence this quality paper was sold at a steep disc.
*Now Post this NBFC Sell Off What is expected ahead ?*
(1) Due to the redemption pressure on DSP Blackrock MF, the fund house had to sell DHFL Bonds at net yield of 11% whereas as per Issue DHFL had yield of 9.1%. This means the Bond was sold at 18% steep discount (Rs.100 bond sold at Rs. 82). After this so many clarifications are coming up by DHFL that it was a secondary market deal wherein they have nothing to do.
(2) Why did DSP Sell?
Ans : Because DSP faced redemption pressure from the Corporate clients holding Funds that have exposure to IL&FS due to downgrade of rating to D from AAA.
This redemption pressure would have resulted in default by DSP and hence they had 2 options :
(a) Either sell GSec
or
(b) Sell DHFL Bonds as investment at a loss.
Now Gsec is already in loss due to Bond yield having risen hence logically if the loss is same it's better to sell Corporate Bonds.
(3) Now hereafter other AMCs having exposure of Rs.2800 crores to IL&FS bonds would get redemption pressure from Corporate clients who have invested in this Rs 16 trillion Debt MF industry. Assuming the avg exposure to IL&FS Bonds as 3% of Gross portfolio this means the value of AUM in such affected funds is Rs. 94,000 Crores. Assuming 25% of such investments are by Corporate Client who do not wish to hold D grade funds the redemption pressure would be a whooping Rs. 23000-24000 Crores.
(4) It's impossible for such schemes to get this amount in a week. Further, illiquid Corporate debt market and DHFL saga results in the fact that AMCs have no option but to sell GSec. Hence, GSec will face a huge selling pressure so either Bond Yield will shoot up to 8.30-8.50% levels or the RBI has to do OMO (Open Market Operations).
(5) If RBI Opts for OMO then the governments spending capacity will reduce by an equal amount and given that elections are around the corner it is impossible for Govt to allow Rs. 24000 Crores out of the system.
(6) The government has only 1 solution: It will have to tell LIC to save IL&FS by ensuring no further defaults specially to Banks and Mutual Funds till elections in order to avoid a financial system crash that will involve a lot of banks, nbfc and Mutual Funds.
(7) At the end of the day public money will be used by LIC to save IL&FS and prevent further defaults.
This will relax the Corporate bond market and stock markets from further panic!
Sterlite plant would not be re-opened: TN govt
The state government had last Tuesday urged the Central Pollution Control Board (CPCB) to postpone today's visit of the expert committee to the closed Sterlite Industries
https://www.moneycontrol.com/news/b...t-would-not-be-re-opened-tn-govt-2976151.html
Does this mean more pain for Vedanta (VEDL)? It has been a laggard as compared to other Metal stocks. Also, stuck in a narrow range.
The state government had last Tuesday urged the Central Pollution Control Board (CPCB) to postpone today's visit of the expert committee to the closed Sterlite Industries
https://www.moneycontrol.com/news/b...t-would-not-be-re-opened-tn-govt-2976151.html
Does this mean more pain for Vedanta (VEDL)? It has been a laggard as compared to other Metal stocks. Also, stuck in a narrow range.
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