Ask me Anything on Trading & Investing

Hi Karthik,

I have this doubt. Today being the F&O expiry day, market opened very low. Just wanted to know why this is having impact on the actual stock price, as
!)If they are in profit/Loss in Futures, they would ideally close their positions., Will F&O expiry can impact actual stocks so much.
2)How do Mutual Fund/FII see F&O expiry. If my understanding is correct, they wont trade on F&O. They can only cover their existing positions.
Can you throw some light on this:slight_smile:

Sir what is rollover?
I know it’s selling Nov contract and buying december.
But why am I confused is because on certain websites I saw 2 different contracts listed

  • one called Nifty 30nov fut and other called nifty30novfut-rollover.

Also is there any diff. process of rollover or just simple buy and sell by 2 diff orders

Dear Kartik, I have some query on the explanation you gave

1- 11k is net loss for both the trades or it is 10k in 145 CE trade and 11K in 125 CE both summing up to 21K los as a whole?
2- If net loss is 1/- or rs 5000 on 125 CE, then how is the net loss calculated to 11K?

  1. The 2nd half of the day is usually more active on expiry days
  2. Not really, but the futures price converges with the spot price
  3. Not all MFs are worried about expiry. However, there are few funds focused on arbitrage, they may get a little active on expiry day. Everyone has the same view on expiry - that the markets may turn volatile.

Since the expiry days are quite volatile, its best to scale down intraday trading on such days.

Rollover is the act of squaring off the current month contract and initiating the same position, same quantity in the next month contract. Ex : Sell 3 lots on Nov Nifty Futures, Buy 2 lots of Dec, Nifty Futures.

The Nity30novfut-rollover is not a standard naming convention by exchanges. Where did you spot this? Also, there is no different process for rollover, this is the only one.

Hey, sorry…that was a typo. Loss will be 10K on 145 CE and 5K for 125 CE. So 15K in all.

Sir, what’s the reasons of sudden u turns in prices like just happened in Nifty.
The ones using 15 min candles couldn’t even exit.(due to -trade your plan- thing).
A candle before, every long trade was in profit and suddenly this happened!
That too when every indicator was signalling buy.
Are we retail traders being played with?
Just see today’s Nifty

Ok, so my calculations are ok about the loss. Thanks.

Now can you plz let me know about the concept of ‘hedging’. I have seen in some discussions at business channels that the experts suggest to buy a call and sell another so that one can atleast stay at some profits as a whole. Can you plz elaborate this with an example. Lets take the Underlying as 132, strike price as 135 at expiry, CE 145 and 125 @ 2 rs and 11 rs respectively, market lot 5000.

Hello Karthick,

I would like to learn more about fundamental analysis, concepts, measures etc and industry wise benchmark. Would suggest any literature for learning these topics.

Secondly, Which is right website to screen the best stocks ( i.e the website which has the data credibility)

This is quite common on expiry days, Maddy. In fact, it is quite prudent to expect (and be prepared) for such moves on expiry days.

Hedging is about insulating your position against any adverse market movements. So even if the market falls, you will not make any loss. There are multiple ways in which you can hedge your position. Here is one technique.

We have discussed Fundamental Analysis in great depth here and I really think the content here is a great start to learn the subject.

Hi Karthik,

One more comment of yours before we let you go.

Looking into this NIFTY options chain data for 29th NOV 2017.

In your Opinion, Was this NIFTY movement for today 30th NOV 2017 predictable ?

Hello Bro,

Is that a open source tool that is available in the market bro. Could you please let us know.

1 Like

Bro, About this screenshot, another Bro share with me. I do not have the program myself.

I just did google on this and found the sheet could be downloaded. But need to figure out how we can feed data.

@Karthik Could you please help us if you can

1 Like

This move was predictable in the sense - one should have anticipated or rather prepared for this since it was expiry. Nothing else could have pointed to this sharp move.

I’m assuming the OI data here is taking in real-time feeds. Relying on real-time OI data is quite tricky, for reasons explained here -

Given this, I would not rely on any tool/product which takes real time OI into consideration.

Even otherwise, I don’t think there was any other way to predict this move.

Btw, looks you are trading with another broker:)

Maybe you should consider opening an account with us - this will unify the support, learning, and execution services for you :slight_smile:

1 Like

This excel looks too colorful and complicated. Need to spend sometime to figure out whats happening. But please take note of this - Is the live open interest(OI) data being provided by exchanges correct?

Hey Guys, this concludes this AMA. Thanks for all the questions and makes sure to join the next AMA on Monday.

2 Likes