Hi , some analysts post something after market falls yesterday.
If there is any short covering in these stocks today, there will be a big rally in our markets.
As i understood in positional we cannot stbt , so home come short covering possible ?
By short covering they are referring to futures and options.
Check this (btw suggest you to go through the entire module.)
Should derivatives price affect stock prices . What’s your view on same . I am in view that serious traders trade in FnO most of time and therefore it should affect stock rather then traditional definitions that derivatives derive their value from securities.
What’s your stance on this.
Or course derivatives trading drives price of the underlying (opposite to the theoretical definition). Over 85% of all trading volumes come from derivatives.
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what you mean , so underlying price is moved by derivatives ??
He doesn’t mean, it literally changes the prices automatically.
People / Hedgers etc. would be buying or selling the underlying along with the derivates as well.
If this didn’t happen, it would create an arbitrage situation, which would be filled, driving the prices back to equilibrium.