Pre Market Report 03-Sep-2024
Summary
TLDRUS markets are closed, Asian markets are mixed, with the Nifty index slightly higher. Retail investors are puzzled by the missing $5 billion inflow, while HDFC Bank's performance disappoints. Nifty options show a rise in put premiums and a drop in call premiums, with aggressive selling of calls. The script discusses unusual premium movements, open interest, and resistance levels around 25500, suggesting a bullish view. Institutions continue buying despite market highs, indicating a strong trend. The speaker anticipates potential market movements and shares their current options strategy.
Takeaways
- 📈 US markets are closed, and Asian markets are mixed, with the Nifty index slightly higher.
- 🤔 Retail investors are confused about the missing $5 billion inflow.
- 📉 HDFC Bank's performance is disappointing, affecting the overall market sentiment.
- 🔍 Put premiums are increasing, while call premiums are decreasing, indicating a bearish trend.
- 📊 Option writers are aggressively selling calls, suggesting a belief in a potential market downturn.
- 📉 Nifty future is experiencing a significant drop in premium, wiping out 80 points in a single trading session.
- 🔑 The highest open interest is at the 25500 call option, which could indicate resistance at this level.
- 💹 Despite the premium depreciation, domestic institutions continue to buy, which is unusual at all-time highs.
- 📍 The support level is estimated to be between 25,000 to 24,950, with resistance around 25,500 to 25,550.
- 📌 The speaker maintains a bullish view, suggesting that the trend is still up and advises traders to follow the trend.
Q & A
What is the current status of the US markets mentioned in the script?
-The US markets are closed for the day.
How are the Asian markets performing according to the script?
-Asian markets are mixed.
What is the confusion among retail investors as per the script?
-Retail investors are confused about the whereabouts of a $5 billion inflow.
What is the performance of HDFC Bank as mentioned in the script?
-HDFC Bank is disappointing.
How are the option premiums behaving according to the script?
-Put premiums are increasing while call premiums are decreasing.
What unusual activity is observed in the Nifty future premium as per the script?
-The Nifty future premium wiped out 80 points in just a second trading session, which is unusual.
What is the highest open interest according to the script?
-The highest open interest is at 25,500, but this is influenced by hedging and margin benefits.
What is the current resistance level for Nifty as per the script?
-The resistance level is between 25,500 and 25,550.
What is the support level for Nifty mentioned in the script?
-The support level is around 25,000 to 24,950.
What is the behavior of domestic institutions as per the script?
-Domestic institutions are continuing to buy even at all-time high levels, which is unusual as they typically book profits.
What is the advice for traders according to the script?
-The advice is to maintain a bullish view and follow the trend, as the trend is still up.
Outlines
📈 Market Analysis and Trading Insights
The speaker discusses the current state of the US and Asian markets, noting the US market is closed and Asian markets are mixed. They highlight the confusion among retail investors regarding a missing $5 billion inflow and the disappointing performance of HDFC Bank. The discussion includes the behavior of put and call premiums, with options writers aggressively selling calls. The speaker summarizes yesterday's trade and predicts similar market behavior for the current day. They also delve into the unusual movement of the Nifty future premium and the open interest in different strike prices, suggesting that the market might see resistance at 25500-25550 and support at 25000-24950. The speaker concludes by maintaining a bullish view, influenced by institutional buying patterns.
💹 Bullish Market Trends and Strategy
In this paragraph, the speaker continues the discussion on market trends, focusing on the behavior of domestic institutions which are unusually buying at all-time highs instead of booking profits. They describe this as a puzzle and contrast it with typical institutional behavior. The speaker emphasizes the ongoing bullish trend and advises traders to follow it. They recount the previous day's market movements, where the Nifty future premium came down, leading to aggressive selling of call options. The speaker anticipates a potential gap-up scenario that could force these sellers to cover their positions, driving the market higher. They also mention their personal trading position, holding a 25,000 put and a 25,700 call, and express anticipation for the market's next moves.
Mindmap
Keywords
💡US markets closed
💡Asian markets mixed
💡GI Nifty
💡Retail confusion
💡HDFC bank disappointing
💡Option writers
💡Put premiums
💡Call premiums coming down
💡Open interest
💡Nifty future premium
💡Resistance and support levels
Highlights
US markets closed; Asian markets are mixed with GI Nifty slightly higher.
Retail investors are confused about a missing $5 billion inflow.
HDFC Bank's performance is disappointing, affecting India weeks.
Put premiums are increasing while call premiums are decreasing.
Option writers are aggressively selling calls.
Nifty is going up while Nifty future is coming down, wiping out 80 points premium in a single trading session.
The usual gradual depreciation of premium did not occur; instead, it was a sudden move.
Highest open interest is at the 25,500 strike, but it's influenced by hedging and margin benefits.
The second highest open interest at 25,300 is influenced by both call and put writings, indicating a short straddle position.
After removing hedging influences, the highest open interest is at 25,500, suggesting resistance at this level.
The support level is around 25,000 to 24,950, with 24,975 being a key level where Nifty went long.
Those taking a 25,300 straddle position have a break-even point between 25,100 and 25,500.
Domestic institutions continue to buy at all-time highs, which is unusual as they typically book profits.
The trend is still bullish, and traders are advised to follow the trend.
The Nifty future premium came down, leading some to believe the trend is bending, but the speaker suggests this is typical in a bull market.
The speaker anticipates a gap up that will force aggressive call sellers to cover, pushing the market higher.
The focus remains on the same set of stocks, with no significant changes expected due to the US market being closed.
The speaker holds a 25,000 put and 25,700 call position, created on Friday, and is monitoring potential adjustments.
Transcripts
right us markets closed uh Asian markets
are mixed GI Nifty is slightly higher
and Retail people are totally confused
wondering where is that $5 billion
inflow
HDFC bank is disappointing India weeks
is shooting up put premiums are going
higher and call premiums are coming down
and option wrers are selling calls
aggressively so this is the summary of
yesterday's
trade right and today also uh like say
yesterday it is not US market close US
market you know slightly higher on
Friday and today also it's almost the
same uh just instead of US market
slightly higher we have to use the words
US market closed for today US market
closed Asia is mixed GI Nifty slightly
higher and I'm sure retail will be
confused today
also uh the way markets are you know
behaving uh Nifty is going up and Nifty
future is coming down and Nifty future
wiping out 80 points premium in just a
second trading session in the series
which was
unusual and usually after a week the
premium comes down and towards the end
of the series you know the premium comes
down to 20 30 points you know that uh
depreciation of the premium happens
gradually but what happened yesterday it
was a very very big and sudden
move looking at the open
interest now
25,500 column option as the highest open
interest but if you look at the number
the number will tell you a different
story that's because 26,000 call option
which is the highest open interest now
that's because the sellers also buy
there for hedging and margin benefit the
buyers also buy there so therefore we
have to ignore that the second highest
open interest is at
25300 that also we have to ignore
because you know uh it is not only the
calls are written at 25300 and puts are
also written so that means the people
who are taking short
strle so if you put it in a candle you
know the put candle will be smaller call
calendar will be bigger but you have to
take out that so equalent to put the
equal call you have to take out so that
remaining calls are the naked calls so
that is very very low so if you knock
out these two then the highest open
interest is at
25500 so therefore you know the people
you know the way the future premium is
falling the way the bank Nifty you know
disappointing especially HDFC bank and
the people think 25500 will be the
resistance and maybe another 50 point
you know people who are selling 25500
call will also be selling 25,000 Port so
you know combined premium is about 4050
points so they are not going to lose
even if Nifty Falls to
24950 or even if it goes to
25550 so we can say 25500 to 25550 is a
resistance we have three more trading
sessions a support there is no need to
talk about the support
24975 is when the Nifty became long so
now that resistance will become a
support now so roughly we can say 25,000
to 24950 is a support on the
downside the people who are taking 25300
stradle also so the combined premium is
about 200 rupees you know so the break
even will be 25100 to
25500 and of course you have to keep
another 500 point you know because they
will be doing some kind of an
adjustments the people who are doing the
strategy they won't be deploying the
full capital
so all in all you know uh it is time to
maintain the bullish view even now and
because look at the way institutions are
pouring in the
money
yesterday both FAS and Das were n buyers
on Friday both F and Das were n
buyers and like faia buying you know we
can understand because there is a
compulsion for them to deploy 5 billion
you know because of MS balance this and
that but why the domestic institutions
keep on buying even at this level
whether Market is you know keep on
making alltime high this domestic
institutions keep on buying so that's a
real puzzle and usually that is not the
behavior of the domestic institutions
when the markets are at alltime high
they will tend to book The Profit but
this time they are not booking the
profits so therefore you know if you're
a Trader the trend is up still and trend
is your friend until it bends you know
yesterday the Nifty future premium came
down the people thought no it's bending
so that's why they sold aggressive call
options but let me tell you the real
bull market will work like this only so
they will give you the hope for bulls
that markets have reversed sorry they'll
give a hope for the beers that the
market has
reversed they'll make them to sell
aggressive calls then something one of
the other good thing happen Gap up then
these people have to run for cover so
Market moves higher so let us see
whether that happens today or not so
otherwise it is the same set of stocks
uh that will be in Focus uh there is
nothing big change because US market is
close and you know uh things are
expected to be flat you know based on
the FI Buy sell you know there may be
slight premium you know yesterday both
fa and were not buyers and that's why
the GI Nifty is IND getting 1020 Point
higher opening otherwise it will be
opening 1020 Point lower so that's
nothing up to 50 to 100 Point move you
know the time value people will make
money so let us see so I also have
25,000 put and
25,700 call I think I told you already
yesterday which I created on Friday I'm
still holding it so let us see whether
I'm going to make full profit or I may
have to do some adjustments along the
way so that's it for now hope you
enjoyed watching this video thank you
for watching
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