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Pre - Market Analysis (2nd Dec 2020)

  1. US markets closed higher Yesterday.
  2. But now U.S Futures are down 0.5%
  3. Asian Markets are Flat.
  4. SGX Nifty is Trading around 13150.
  5. Our Markets are Blindly following the Global Markets.
  6. Yesterday U.S Futures were higher so we closed at high point of the day.
  7. This is happening from quite some time now.
  8. FII's haven't stopped their buying.
  9. Yesterday also they have bought for 3200 crores.
  10. DII's booking profits at higher levels.
  11. Yesterday many traders expected that Volumes would reduce considering SEBI peak margin norms.
  12. But surprisingly yesterday volumes were adjacent to the regular volumes.
  13. Brokers are taking some time in getting adjusted to the new norms.
  14. We might consolidate within the range of 13000 to 13250 for this expiry.
  15. Nifty might Trade between 13060-13240 today.
  17. Question of the day by MR. Steveraj.
  18. How do options work? Like If I bought a Call Option when do I make profit and when I sell option how do I make profit ?
  19. Let's take an Example , Say you are Bullish and you are expecting Markets to go higher.
  20. You have bought 13200 CE Nifty at 50rs & you intend to hold this until expiry.
  21. Your profitability for this will begin after Nifty crosses 13250 (13200 + Premium (50rs)
  22. Say Nifty expires at 13280 your Net profit per lot is 30rs & if it expires at 13220 you lose 30rs.
  23. Say you are Bearish and you sell 13200 CE at rs 50. Now your Breakeven for this is 13250.
  24. Say Nifty expires at 13280 , you lose 30rs and if Nifty expires at 13220 you make 30rs.
  25. Without Understanding this basic structure many traders buy and sell options which isn't advisable.
  26. It's Important to Gain knowledge and Understanding before Practical IMPLEMENTATION.


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