Day Trading Stocks & Futures
- Thread starter TraderRavi
- Start date
- Tags banknifty bnf daytrading nifty future
I hope to find the full article for the following :
Is This Trade Betting On The Nifty Dropping 50%?
https://www.bloombergquint.com/markets/is-this-trade-betting-on-the-nifty-dropping-50.amp
Is This Trade Betting On The Nifty Dropping 50%?
https://www.bloombergquint.com/markets/is-this-trade-betting-on-the-nifty-dropping-50.amp
From this article :
An unusual trade is happening in the futures and options market.
There’s a build-up in open interest—or the number of outstanding contracts—of June 2019 Nifty 50 call options for 5,000 strike.
Simply put, someone has bought options to buy Nifty 50 at 5,000 points in June. That’s less than half the current value of the benchmark which is trading at more than 10,800 levels.
A call contract gives the holder the option, but not the obligation, to buy a security at a pre-determined level or price. These are deep-in-the-money call contracts where the strike price is significantly below the market price of the underlying asset. Such contracts are not unusual in the derivatives market and are used by large institutions to hedge against adverse market events. But in this case, the majority of the options were sold for an aggregate value of at least Rs 422 crore. To bet a high amount on an index tumbling by more than half in six months is strange.
No one expects the Nifty to lose half the value by June, a dealer said requesting anonymity as he is not authorised to speak to the media. This is not a directional trade, he said.
The build-up in the open interest in the contract is entirely new and not a rollover of any past deep-in-the-money contracts that expired in December 2018, according to data available on the Bloomberg terminal.
An unusual trade is happening in the futures and options market.
There’s a build-up in open interest—or the number of outstanding contracts—of June 2019 Nifty 50 call options for 5,000 strike.
Simply put, someone has bought options to buy Nifty 50 at 5,000 points in June. That’s less than half the current value of the benchmark which is trading at more than 10,800 levels.
A call contract gives the holder the option, but not the obligation, to buy a security at a pre-determined level or price. These are deep-in-the-money call contracts where the strike price is significantly below the market price of the underlying asset. Such contracts are not unusual in the derivatives market and are used by large institutions to hedge against adverse market events. But in this case, the majority of the options were sold for an aggregate value of at least Rs 422 crore. To bet a high amount on an index tumbling by more than half in six months is strange.
No one expects the Nifty to lose half the value by June, a dealer said requesting anonymity as he is not authorised to speak to the media. This is not a directional trade, he said.
The build-up in the open interest in the contract is entirely new and not a rollover of any past deep-in-the-money contracts that expired in December 2018, according to data available on the Bloomberg terminal.
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