Hello everyone as elections are nearing there is going to be a lot of volatility in the market, i wanted to know what are the downsides of buying adani call options before elections
the only downside i can see is if BJP doesn’t win and i believe the options market cannot price in BJP winning the elections
if we take a risk on BJP to win the elections i believe there is money to be made
if i am wrong please correct me and teach me
any advice is taken with high regard thank you.
@Skanda
Hi,
I was having same thoughts from last few days, then I checked the previous election results on adani stocks where BJP won. Not the last lok sabha elections as adani got more into news after that. But the recent state elections where BJP won in 3 out of 4 states. And yes, adani stocks rose quite good.
So, it may be possible that adani stocks could show good move if BJP wins in coming lok sabha elections.
Now the other question is, when to buy adani call options? Just before the result day? I think that’s not the very right time, because till then all the media comes up with exit polls and everyone can smell the results. It depends on a lot other factors also like voting percentage and all.
So my thought is to buy adani call options, before the end of the last dat of elections, so when the exit poll comes we start getting benefits.
yes exactly my thoughts, I was checking the implied volatility of adani stocks around 22nd-25 november 10-15 days before the results were announced and the implied volatility was relatively normal compared to after the elections
so it looks as though the options market cannot price in the 2024 elections, as the outcome cannot be decided and buying adani call options maybe towards the end of April or beginning of May might seem like a good time to take a bet.
for some more insight i was checking nifty’s implied volatility before the lok sabha elections during 2019 and the implied volatility of nifty was also relatively normal 15-30 days before the election results were announced
hence i believe the options market cannot price in the election results as its an unpredictable event
and a bet can be taken on adani stocks if bjp wins the election