18
Aug
13

Dream market for option writers

It’s a dream market for any option writer like me. It is extremely bipolar market where sectors like IT, Pharma & FMCG continue to see strong out-performance and everything else is under-performing. In fact, current Nifty levels are held due to strongly performing sectors otherwise rest of the market is below 2008 lows. Although now even these strong sectors are coming in for some selling. Accident continue to happen with heavily indebted companies like JP Associates and its group companies. There is carnage across mid-cap stocks. Infra major like L&T continue to struggle and report poor results. Capex cycle and new projects have completely stalled or postponed. Rupee continues to remain under pressure and RBI continues to douse fire over it. Indian Economy is in shambles and with each passing day , new data point continues to confirm that. Recent HSBC Services PMI also point towards contraction. May be it is just confirming the already known trend. I would be extremely surprised if GDP growth rate for FY13-14 is more than 5 percent.

After L&T quarterly results I had aggressively sold its call options. I have squared off these options and now moved onto other stocks like Titan, Ambuja cements and Power grid. Return wise August has been my best series till date.

Disclaimer: Please take reasonable care while trading in options, especially while selling. I am not advising anyone to sell or buy options. My purpose of writing this blog is to highlight my trading strategies.

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