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India Markets: Euphoria…Retreat Ahead … Leisure or Flee?




Lee’s Dhaba

#fullpost{display:inline;}US rallied on Friday….so why not India on Monday…ahh..all is well with the world.  Stability, calm, control, visibility…NOT.

Other than US Market VIX making a double top…dubious conclusions…everything is on fire.  I am still in shock at the jobs lost figure in the United States.

Be Scared folks..Be very scared…the economy of the developed world is plummeting….there is no immunity, there is no De-coupling.  We can only hope the impact on India will be relatively muted…And that the administration will do more than mimic the ‘Mouse that Roared’ with their fiscal stimulus.

So I bought the Nifty 2800 Dec puts for Rs 105 and the Nifty 2700 Jan puts for Rs 165.

And I sold the Nifty Jan 3000 Call at Rs 135 and the Nifty Dec 2800 Call at Rs 145.

Act on your beliefs, or ….I know there is something witty to add here…but I only believe the first part.

And since this market calls for risk aversion, I bought double the amount of Nifty Jan 3100 calls…the pay-off and risk structure for Dhaba portfolio is shown in the chart below:

(click  image for clearer picture)

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