Friday, July 3, 2009

Budget Strategy

Aggressive traders can buy 4300 PE and 4400 CE and try to sell both in profit on Monday as i expect market to swing both sides. My more bias is on negative side though. No matter what happens do not carry these positions post monday

Explaination:
Today call are positive and puts are also positive what does this imply ??? There are going to be sharp swings on both sides i suppose. As implied volatilities are high options premiums are also high. Traders who are long might not get a chance to exit also. Although Reliance slowly inching towards negative zone today... Remember it has become fundamentally weak also hence can prove to be a major laggard for Nifty. Plan to cover the Fiscal Deficit by selling Government stake in PSU's (Disinvestment lingo) can hit lots of hurdles... Who has got the money to buy stake in PSU's ? Who will buy as there is already a financial crunch ? Which bank will fund private players ? Last time i confirmed they told me entire world is in recession.

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