Why Fear
1- Market at All time High.
2- VIX (Volatility Index) Chicago Board Options Exchange (CBOE) Volatility Index, which shows the market's expectation of 30-day volatility. Is at their all time high level. Which is negative correlated to the Indian stock Exchange (I.e. if VIX is high Market would be low and vice versa)
Why Fun
1- Lower implied volatility in Indian stock Market. (Nifty IV is 19% as on 16-07-2007)
2- July is a Result Month (Good Expectation from the Companies)
3- Lover PE Multiple (Which is going to come down after the results)
In the view of various fund managers from various top mutual funds and the brokerage houses 16000 level is not impossible.
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5 comments:
so should we invest at this level or not
yes u can invest at this level after the study of the stock in detail, and in indian market every level is the right level for investment becouse lots of development and growth is due in india.
good posts! very informative too :)
Rai,
What would be your view on creating Stradle in this market..
Although it would be expensive, do u expect market to be volative in next 20-30 days.
Nifty IV as on Date is 18.5%, historically it’s a good IV for long straddle, but at the same time we should also see the number of day left to expiry (i.e. 9 as on date), so from here the theta loss would be much higher then the Vega gain. So if u are creating any long position then it’s very difficult to compensate theta loss by Hedging gain because market is too stable, although we can expect increase in IV i.e. Vega gain but its very difficult to make money.
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