Dear Friends,
Everybody is busy predicting the election results and how the market will react. While most of us here are technical / chart / PA etc type of traders, this event brings in the fundamental element which is not what most of us are capable of analysing.
Short and sweet but difficult to many, STAY OUT of the market for the next fortnight. There would be markets after fortnight too after all the euphoria built around the election would subside and that might be a GREAT time to make some good killing. But not NOW. Stat away at the moment. Don't FANTASIZE that the you will hit a jackpot by being right and market making humongous move in your direction. Think the other way, the same move in the OPPOSITE side of your decision. And with the kind of levered products, Futures, Options ...it will really be WMDs...literally.
Pro options directional traders may consider completely quantity wise hedged positions with substantially reduced position size (say 1/3 or 1/4 or even lesser) e.g. credit spreads maybe the best if betting on direction (LIMITED LOSS strategies only with a view of NO ADJUSTMENTS till expiry, in case you are wrong), basically you should exactly know how much you will lose at expiry (remember at EXPIRY). Adequate margin money to fund MTM losses of the losing leg, hence the position size should substantially be small.
Pro options vola traders may consider short calender spreads or calender straddles again with substantially reduced position size.
Novice or largely naked option traders it is time to go naked, not in the market but in a swimming pool for a fortnight. Chill the summer in the pool.
In short enjoy the summer vacations with family, go out, be out of the market and come back after a fortnight, fresh, relaxed and funds in your trading account.
Regards,
p.s. : From 1 of June let it be business as usual.
Everybody is busy predicting the election results and how the market will react. While most of us here are technical / chart / PA etc type of traders, this event brings in the fundamental element which is not what most of us are capable of analysing.
Short and sweet but difficult to many, STAY OUT of the market for the next fortnight. There would be markets after fortnight too after all the euphoria built around the election would subside and that might be a GREAT time to make some good killing. But not NOW. Stat away at the moment. Don't FANTASIZE that the you will hit a jackpot by being right and market making humongous move in your direction. Think the other way, the same move in the OPPOSITE side of your decision. And with the kind of levered products, Futures, Options ...it will really be WMDs...literally.
Pro options directional traders may consider completely quantity wise hedged positions with substantially reduced position size (say 1/3 or 1/4 or even lesser) e.g. credit spreads maybe the best if betting on direction (LIMITED LOSS strategies only with a view of NO ADJUSTMENTS till expiry, in case you are wrong), basically you should exactly know how much you will lose at expiry (remember at EXPIRY). Adequate margin money to fund MTM losses of the losing leg, hence the position size should substantially be small.
Pro options vola traders may consider short calender spreads or calender straddles again with substantially reduced position size.
Novice or largely naked option traders it is time to go naked, not in the market but in a swimming pool for a fortnight. Chill the summer in the pool.
In short enjoy the summer vacations with family, go out, be out of the market and come back after a fortnight, fresh, relaxed and funds in your trading account.
Regards,
p.s. : From 1 of June let it be business as usual.
