General Trading Chat

[sharktooth]

Hi ST sir,

Please ignore if this is a naive question.

Was there a reason that markets started falling even after a strong result OR this was just profit booking from big players.

 

[vas2009]

Trade war concerns check US markets

 

[soft_trader]

Hi ST sir,

Please ignore if this is a naive question.

Was there a reason that markets started falling even after a strong result OR this was just profit booking from big players.

NDA win was priced in by the rally which took place on friday and monday. To put it simply, If I tell you a joke repeatedly then you would laugh only once or twice. Same is with market, it priced in the news, so there was nothing new for the market to rejoice. Moreover, world market is in a downturn, so market is adjusting itself with the reality.

 

[traderhardrock]

hmmm
now, if market is able to hold current levels, then will boom again, otherwise will move as per international situation, which is not that good, particularly US Iran situation.

 

[Smart_trade]

Hi ST sir,

Please ignore if this is a naive question.

Was there a reason that markets started falling even after a strong result OR this was just profit booking from big players.

NDA to come in power was there in the price when the market started trading yesterday due to exit polls.....but huge majority and now BJP is not on the mercy of other parties got factored as the election leads started coming.But this correction had to come because the market is over extended and stable Govt alone is not sufficient to push it up.Issues like trade war ,crude oil prices are still there which still bothers the market.

Corporate profitability growth alone can push the market up and if you see the quarterly results ,very few companies have shown strong growth in profits.Consumption sector is slowing down .So after the initial euphoria the market had to correct and due to this smart money used the morning election results rally to offload their holdings and even went short as they saw that the market is not sustaining at higher levels.....and the Market came down....many had read this and traded to their advantage yesterday.....

Smart_trade

 

[Smart_trade]

ST sir, when you get time (weekend alsoisok) , pls tell us how you handled the result day( today) in terms of trading & investment.
Thanks

Sorry,could not reply yesterday as yesterday was a very busy trading day.....

I had a small overnight long position in index futures and a good size position in stocks at the beginning of the day....for the reasons mentioned in my previous post, I was confident that after the results the market will not sustain its high elevated levels .As the market went up I liquidated my long positions ..also when it statted coming down, I sold some stock options ( sold calls ) when the fall came midway and I was definite that the market has changed its direction......overall a very satisfying and profitable trading day.....derivative positions were booked yesterday and the stock sales delivery was given....would wait for buying these again.....was lucky to get the moves right ( Disclaimer : I don’t get them right every time)

Smart_trade

 

[sharktooth]

NDA to come in power was there in the price when the market started trading yesterday due to exit polls.....but huge majority and now BJP is not on the mercy of other parties got factored as the election leads started coming.But this correction had to come because the market is over extended and stable Govt alone is not sufficient to push it up.Issues like trade war ,crude oil prices are still there which still bothers the market.

Corporate profitability growth alone can push the market up and if you see the quarterly results ,very few companies have shown strong growth in profits.Consumption sector is slowing down .So after the initial euphoria the market had to correct and due to this smart money used the morning election results rally to offload their holdings and even went short as they saw that the market is not sustaining at higher levels.....and the Market came down....many had read this and traded to their advantage yesterday.....

Smart_trade

Thanks ST sir

 

[against_tides]

Sorry,could not reply yesterday as yesterday was a very busy trading day.....

I had a small overnight long position in index futures and a good size position in stocks at the beginning of the day....for the reasons mentioned in my previous post, I was confident that after the results the market will not sustain its high elevated levels .As the market went up I liquidated my long positions ..also when it statted coming down, I sold some stock options ( sold calls ) when the fall came midway and I was definite that the market has changed its direction......overall a very satisfying and profitable trading day.....derivative positions were booked yesterday and the stock sales delivery was given....would wait for buying these again.....was lucky to get the moves right ( Disclaimer : I don’t get them right every time)

Smart_trade

I sold some stock options ( sold calls ) : do you short calls ?isin't the risk unlimited in shorting options(as taught in tutorials)??

 

[Smart_trade]

I sold some stock options ( sold calls ) : do you short calls ?isin't the risk unlimited in shorting options(as taught in tutorials)??

I have some long term position in stocks which I hold for a long time. When I see that the market is falling, I sell a little out of money calls...for example I have large quantity of HDFC Bnk and I sold its 2500 May calls.....I do this only when the market has risen ..there is zero risk as if the market shoots up above 2500, I will have a loss in options but will have that much profit in cash stock holding and I will leave the delivery of HDFC Bank above 2500 too happily....so it is a call sale backed by delivery or a covered call so zero risk.....I can sell multiple contracts in scrips like HDFC Bank,Bajaj Finance etc and make some extra money this way...

Smart_trade

 

[against_tides]

I have some long term position in stocks which I hold for a long time. When I see that the market is falling, I sell a little out of money calls...for example I have large quantity of HDFC Bnk and I sold its 2500 May calls.....I do this only when the market has risen ..there is zero risk as if the market shoots up above 2500, I will have a loss in options but will have that much profit in cash stock holding and I will leave the delivery of HDFC Bank above 2500 too happily....so it is a call sale backed by delivery or a covered call so zero risk.....I can sell multiple contracts in scrips like HDFC Bank,Bajaj Finance etc and make some extra money this way...

Smart_trade

Thanks .really appriciate the detailed explanation..very informative...