People price in further increase in underlying Price. In other words they expect the gamma to increase more. Therefore the IV increases. But if there is no follow through in price, the Volatility subsidies, and IV falls and premium come back to their theoretical value. Most of the time this works. But in a trending market, this can cause problems for the option sellers
IV falls first or gamma falls first when volatility subsidies ?
Gamma is related to price, so gamma remains the same. IV falls.
i will always try to buy next week strike price because theta is low on next week , bank nifty have a muscle to move up or down suddenly 2000+ or - points in blink of eye
Dont underestimate the bank nifty , if bank nifty start to rise or fall the speed is ,like a
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So Gamma will be high as long as lots of option buyers keep buying and option sellers keeps closing , hoping market gonna go violent right.
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Now a days i am really fear , because unstably in macro environment , every day have some news , i will little bit caution in market
market is overvalued , GDP is down Market Is in high , i am expecting big correction in the market in coming month or after budget , budget is holding the market , there is mismatch in GDP and Nifty , its will come on equal line very soon
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This is a overestimation. This doesnât happens as commonly as you made it seem. Only a big event can cause it. Like a budget or a corporate tax or a black Monday/friday or a election. Will happen maximum 2-3 times in a decade.
what a point i mention you did in understand , if you can predict when the big event will happen , then you are the master in the market
See Demonitization , the event we knows never know ,bank nifty swing 2800+ point , and nifty swing 1000+ point lot of option sellers wipe out , one event is enough to kill , always respect gamma
you are correct not all the times , but which days which time no one knows , thats the market , can you tell how many people is winner in weekely option , monthly option is safer than weekely option
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Your analysis is heavily flawed. Yes it is true that economy is in a bad state right now. But market looks forward and not backwards. Market knew economy will slow down. You may know now that gdp growth rate is 4.5% but market felt it last year. Market corrected around 15% last year. But now, market feels the economy has bottomed out and is estimating the economic scenario of next 1-2 year and is betting on next leaders.
Thatâs why the positions should be hedged instead of living in fear of a Black swan event
2008 january 1 analysist estimate market will touch this year will high , what happen next ,
if its not recovered what will happen , every body guess rate cut will happen , i guess rate cut will not happen because big elephant in the room as inflation , my guess is correct , 2020 GDP will not come back its will take time , market moved only because of expectation not on reality , In my years of experiance , if the expectation is not become reality , its reverse
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What uâve done during demoneitization?
You have not given any fact or reasoning to substantiate your prediction. All your are saying is to believe you and your experience and your elephant. You keep saying it was a guess. Also looking at hindsight is easy, looking forward requires vision and assimilation of all facts rather than selective picking them to support your view point.
As your logic of inflation and rate cuts, they alone donât predict the state of economy or the direction of Financial markets. A booming economy can have inflation that might need a rate cut to curb it.
i deployed only bullish cum bearish strategy demonetization will never affected , if market goes down i am full of in profit if market goes up like 1000+ point only i will face some loss the same loss also i will adjust and i will come out , Call we can manage easily , but Put we cannot manage
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All the more reason, you shouldnât make any prediction that market will touch low in 2020. You never know that in 2029, somebody in this very forum may write that an analyst (you) made a prediction that market may dip and instead it kept on making new highs.
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I am Trader Cum Investor , when market take Dip i will invest more money , i always divert the trading profit to on investment , so i always in balanced in the market , so everybody want to learn how we can balanced in the market
I am 0% predicting the market , I am not a trend trader also , i am always NON-directional Trader
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You need real plan & courage to put a trade day after day. There is 180° Degree difference between saying something and doing exactly the same in real life.
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