Until a fortnight back, the market almost belonged to the buyers of call options. However, the scene has changed last week.
Index movement shows we just had a bearish week. The Nifty ended last week with a loss of 1.25 per cent. Despite this, the sentiment, however, was more or less intact in the broader market.
Call option-holders were at a clear advantage last week, as the Nifty broke its previous high and gained more weight in a short span of time.
Last week saw a marked improvement in market sentiment. The movement of the index was distinctly positive and the market breadth was good for the large part of the week.
It is not common to see fear, greed and hope walking hand in hand on Dalal Street. At any point, the Street is dominated by either one, or even two, of the sentiments.
Having just three full trading sessions, the market was expected to witness lacklustre trading, given the holiday mood prevailed on the street.
While the Nifty closed last week with nearly 2 per cent gain, the confidence level in the market was rather weak.
After staying below its 50-day moving average (DMA) for seven trading sessions, the Nifty finally climbed above the average on Friday. This was a key move for the index.
Traders who habitually sell out-of-the-money put options to collect small premium got a reminder last week that what appears easy money in the derivatives market comes with risks that can take away
The most dumped element in a bull market is, caution.