Trade setup for 8th july


  1. Friday we had a major event. Nirmala seetharaman presented the budget in the parliament.
  2. Nothing which market expected was given.
  3. All the things announced was related to the long term. The rich who earn more than 2cr per annum are taxed more.
  4. The budget was more for the long term and was designed keeping 5-10 year horizon.
  5. My expectation on corporate tax, LTCG was not delivered. I thought something would be given to the auto sector and the aviation sector. But nothing went as expected.
  6.  On Friday, markets opened in green. But finally closed in deep red. Maybe the budget did not bring much enthusiasm among investors.
  7. I somewhat expected that markets may not rally as we had a major event(elections) recently.
  8. So 12000 may not be broken that easily. The G20 did not provide much energy to break it. The budget did not provide energy to break it. Now we have earning season. Let's see if that provides the energy to break it. I doubt it,
MY TRADES
  1. When nifty was around 11800, I had a 12000 short straddle. To hedge this I had a 31000 short straddle in banknifty. I took this trade when banknifty was at 315000. To cover the downside, I am still carrying long puts in both nifty and banknifty.
  2. On Friday, Nifty went close to 12000 and I closed my 12000 short straddles in wonderful profit.
  3. Now markets are falling and my 31000 straddles will also give wonderful profit as premiums will fall after the event. Plus, the puts that I bought will also rally. Planning to close the long puts today and carry banknifty straddle to expiry. Will be hedging that in the weekly options.
  4. The covered calls which I have executed in my underlying portfolio will be in green but my portfolio will bleed.
INTERNATIONAL MARKETS
  1. On Friday, the US markets closed in the red. Dow snapped 4-day winning streak.
  2. The European markets also closed in red and they lost around 0.5%.
  3. Today morning Asia is in deep red. Nikkei, hang sang are all down by more than a per cent.
  4. SGX also indicates that we may open in the red. It is down by 60 points now
CRUDE AND $
  1. On Friday, $ closed at 68.42. As long as it is below 70, we can assume that India's economy is performing well. 
  2. Crude is now at $64. Crude is falling and this is good for India.
FII AND DII DATA
  1. On Friday, FII sold 89cr and DII bought for 275 cr

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