After a steep decline, an equally strong up-move by the Nifty took by surprise all the traders who had assumed that the index would now continue to slip and accordingly took excessive short positio
Probably, it is a week the bulls would like to forget. Even the last sector standing and giving some market stability fell to bear hammering.
Riding high on their success in the September series contracts, the bears were happy to rollover short positions in the October series that closed last Thursday.
When the market is suspicious of a sector, even the smallest excuse is enough to pull the shares of that sector deep down. That was what probably happened to the financial sector last week.
High volatility, or a sudden, strong directional move, can wipe out one’s trading profit in a matter of hours. Unfortunately, the market is now undergoing such a volatile phase.
An investor can never control market movement, as this is a function of numerous variables. But an investor can certainly control his/her response to market movements.
In all the recent turmoil in markets across major parts of the globe, there was one last market standing: the US equity market.
It is rare for buyers of both call and put options to be caught on the wrong foot. But it happened last week. All who had bought call options on Wednesday were in losses on Thursday.
At least, now no one can say the Nifty is not reflecting the broader market decline. Finally, last week, the Nifty too joined the crash course, in full force.
For the third week in a row, traders with long positions on put options have enjoyed an upper hand in the derivative market as they could log both intraday and intraweek gains.