To utter surprise of all expectations the inflation expectation data shows that it rose to 11.05% a 13 year high, and immediately entire market crashed. One interesting feature is this level is reached with a "partial pass through of oil price" recently by government. If one recollects petrol price was Rs.50/- while indian crude basket reached US$67 or so., last year. Now, 10% hike in petrol and other products, brought this level of inflation, though indian crude basket touched US$132 recently. if one has to really pass through the hike in crude price, theoretically the petrol should be sold at Rs.100/- unacceptable to any person in the country.
Just imagine, if that is done what will be the effect on inflation and what happens to growth??? which the government is boasting yesterday on all channels will be 8.5% this year too. Another important issue is, if pass through is not passed on to the consumers, then actually some body else is paying it!! Oil marketing companies, government through widening of fiscal deficit. This again is bad news for economy and equities in particular.
Strategy for the Day: If one has bought 4600 puts in the early morning, as recommended by me, they can book profits now itself, as markets might recover later.
6 comments:
hmmm good observation ... by te looks of global markets also looks like monday too will be a gap down opening followed by additional selling as political uncertainties also prevail...
any advice on rpl ..ihave 2 options for next month ...buying the nifty 4200/4300 call or buying rpl 170/180 call options.
Thsnks. 4290 is the 50% retracement of entire bull run, where support should come, thus, buying 4300 calls of July series is a good bet which are currently trding at 215.
Disclaimer: I went long on the same strike price at the end of closing on friday!
rao sir,
do u still hold the short position of 4800 put of june series? i could not understand the logic??
saba
dear saba,
the 4800 put option short position is of July series, not june; till friday's crash/fall it was ok, as there is another contra hedge in the form of short position 4700 call option.
theoretically it had a stop loss at 4500, which got triggered on friday, on my personal portfolio, where as since i could not access google site before hand, missed to suggest the same stop loss in the blog!
However, in such a situation, one could have gone short on nifty futures below 4503 with a stop loss for futures at 4525 to hedge the downward risk.
Thus, if one has followed the strategy and still running it keeping margin, I feel that there will be a bounce before expiry on 31.07.2007, where one can exit the position, with minimum loss or even profit, instead of closing now, as the margin of Rs.80,000/- shall take care of trigger price.
thanks
bkvrkrao
thank you for clarification sir.( i dont have any such position.but i would just know the logic,because i find most of your calls are just perfect)
if we use ICICI we need to give the stoploss limit daily?
saba
YES STOPLOSS IS TO BE GIVEN DAILY.
Post a Comment