This post was written on 01-Feb-21 at 11.46 am.
Today, Monday, 01-Feb-21, is Union Budget 2021 day. Its live now in the Indian Parliament. Finance minister Nirmala Sitharaman is announcing the budget in the parliament now.
Whenever there is a major financial event, as a trader you should keep a track on India VIX:
https://www.moneycontrol.com/indian-indices/india-vix-36.html
As on 11.46 am it has already crashed more than 3.9% because the announced has started – the fall will be much swift from tomorrow. With time and very fast it will keep crashing irrespective of the movement of Nifty/stock markets.
India VIX 01-Feb-2021
What Will Happen?
Options buyers will suffer as the premiums will erode like ice melting, today and tomorrow especially.
If you have bought options and if in loss in such times, I suggest take a stop loss save as much as possible.
Option sellers have luck on their side on these melting India VIX days after the major event ends. Even if wrong up to some extent option sellers will benefit.
Update on 03-Feb-21 – see this graph of India VIX:
Note: India VIX was the highest one day before the budget 21 which was Friday, 29-Jan-21. It started to fall from the Budget day – 01-Feb-21. It will keep falling in future too.
Update on 04-Feb-2021 – India VIX dropped to 23.02 which is 3.07% less than previous closing:
India VIX 04-Feb-21
Conclusion:
For option traders India VIX is a very important factor to decide the future action. Its always good to buy options when India VIX is low and increasing. Which means you can buy options 3 to 4 days before a major financial event like union budget, RBI policy, state or general elections etc. And sell them just before the event day.
Once the event day is over you can start selling options.
Hope this article will help you to take a decision on when to buy and when to sell an option.
If you do my course you will be able to trade whenever you want and without too much risk as all trades are hedged. And most importantly you will not have to continuously watch the markets.
Click to Share this website with your friends on WhatsApp
COPYRIGHT INFRINGEMENT: Any act of copying, reproducing or distributing any content in the site or newsletters, whether wholly or in part, for any purpose without my permission is strictly prohibited and shall be deemed to be copyright infringement.
INCOME DISCLAIMER: Any references in this site of income made by the traders are given to me by them either through Email or WhatsApp as a Thank You message. However, every trade depends on the trader and his level of risk-taking capability, knowledge and experience. Moreover, stock market investments and trading are subject to market risks. Therefore there is no guarantee that everyone will achieve the same or similar results. My aim is to make you a better & disciplined trader with the stock trading and investing education and strategies you get from this website.
DISCLAIMER: I am NOT an Investment Adviser (IA). I do not give tips or advisory services by SMS, Email, WhatsApp or any other forms of social media. I strictly adhere to the laws of my country. I only offer education for free on finance, risk management & investments in stock markets through the articles on this website. You must consult an authorized Investment Adviser (IA) or do thorough research before investing in any stock or derivative using any strategy given on this website. I am not responsible for any investment decision you take after reading an article on this website. Click here to read the disclaimer in full.
My student gets the Winner's Certificate of Zerodha 60-day Challenge - Click here and Open Stock Buy and Sell Free Account with Them Today!!!
Testimonial by a Technical Analyst an Expert Trader - Results may vary for users
60% Profit Using Just Strategy 1 In A Financial Year – Results may vary for users
Testimonial by Housewife Trader - Results may vary for users