Recent Posts

1

Equity Investments, Fundamental Research and Sectors Review / Re: NIFTY FY 2025 26 EPS

« Last post by resh on March 20, 2026, 09:08:45 PM »

Mirae Sharekhan Research expects it to be Rs 1,108
Motilal Oswal Research puts it at Rs 1,080
Emkay Equity Research pegs it at whopping Rs 1,140
HSBC expects it to be Rs 1,103
IIFL Securities expects it to be Rs 1,066

JM Financial expects it to be Rs 1,100 while Goldman Sachs has it for CY 2025 ending Dec-25 at Rs 1,080

We get a sense it will be around Rs 1,080 for FY 2025-26 looking at the Research House Estimates.

2

Equity Investments, Fundamental Research and Sectors Review / NIFTY FY 2025 26 EPS

« Last post by resh on March 20, 2026, 08:28:09 PM »

Here is the Summary of the Nifty 50 EPS based on which the Majority of the Indian Market & Derivatives Trade. However, we'd like to know what is the NIFTY-50 EPS likely for this FY 2025-206 and is the VALUATION justified by the Growth and the sub-standard Infrastructure and Defense development which in our opinion is reckless spend of Tax Payers Money along with Freebies.

Nuvama Institutional Research expects modest Rs 1,060
Kotak Securities Expect it to be Rs 1,072 (8.2% Growth over last year)
Axis Securities estimates it to be Rs 1,082
SBI Mutual Fund Expects it to be Rs 1,098
Elara Securities pegs it at Rs 1,099
Yes Securities estimate it at Rs 1,080
ICICI Securities estimates Rs 1,060


IDBI Capital paints an extremely rosy picture of Rs 1,170 (Now you know why IDBI Bank is loss making and is up for sale)

3

Derivatives / Trump Trade Deal BlackSwan in Indian Nifty

« Last post by resh on March 18, 2026, 06:42:49 PM »

The Indian Nifty-50 Index was severely beaten down on Feb-1st the Sunday because of raising of STT on Futures & Options by the Finance Minister in Budget for 2026-27. Nifty 50 had closed at 24,825 on Sunday.

It recovered to 25,088 on Monday, 2-Feb-2026.

Without any scheduled announcement on India US Trade Deal, Donald Trump announced that a Trade Deal has happened which caught the Indian side in surprise as well. In reality, he removed the excess 25% Tariff because of Russian Oil and 25% Tariff imposed in April 2025 and brought it to down to 18% unilaterally.

This Happened after Market Hours in India and the GIFT Nifty which has no liquidity shot up by 1,200 Points.

In India the Nifty Opened on 3-Feb-2026, Tuesday at 26,341 a Gap up of 1,253 Points on a Weekly Expiry Day with massive Gamma Effect. Insiders who accessed the Trade Data know that some FII have made a huge killing as Rs 2 Option of 25,700 shot up to Rs 200. LIC & Indian institutions who had bought at 25,000 Levels kept supplying in CASH Market to Maintain Nifty for smooth expiry.

How Traders were Trapped ?
1. Trend Following was Down nobody expected such a massive Gap Up and lost heavily
2. Since it was Weekly Expiry nobody knows how the options are priced because of such massive massive gamma
3. Personally, I could get out without any loss in SENSEX Expiring on Thursday.

Biggest Lesson - BlackSwan can happen on the Upside as well.  Always Hedge on the Upside as Well. Rohit Srivastava of IndiaCharts said so many FAR OTM CE Seller Accounts were wiped out. Theoretically, if there is no hedge then you are bound to loose Infinite on either side else you loose whatever the Hedge is.

What I missed doing in the Carnage ?
I had small positions due to Budget and could have rolled over some CE to next Week but in panic could not. So it is essential to stay cool and think and act.

4

Derivatives / Difference between IV and VIX

« Last post by resh on December 17, 2025, 01:29:03 PM »

IV (Implied Volatility) and VIX both relate to expected market volatility, but they’re not the same thing.

1. Implied Volatility (IV)

What it is:
IV is the market's expectation of how much a specific asset (stock, ETF, index) will move in the future.

Key points:
Derived from option prices
Applies to one underlying (e.g NIFTY)
Usually quoted as an annualized percentage
Changes constantly with supply and demand for options

If RELIANCE has an IV of 20%, the market expects NIFTY price to move about ±20% over the next year (not direction, just magnitude). It is that of ATM.

2. VIX (Volatility Index)

What it is:
VIX is an index that measures the market’s expectation of 30-day volatility for the Nifty 50.

Key points:
Calculated from NIFTY index options
Represents overall market volatility, not a single stock
Often called the “fear index”
Expressed as an annualized percentage

Example:
A VIX of 15 implies expected annualized volatility of 15% for the Nifty 50 over the next 30 days. It is calculated using current and next month option prices (Monthly Expiries)

When VIX rises, IVs of many stocks usually rise too
Individual stocks can have high IV even when VIX is low (e.g., earnings)
VIX is essentially a weighted average of Nifty implied volatilities

5

Derivatives / Who is Buying Far OTM Options ?

« Last post by resh on December 17, 2025, 01:16:56 PM »

Let's say Nifty spot is at 26,000. 5% away it is 24,700 or say 24,500 - Who are Buying these strikes and Why is the big question ?

If some Institutional Investor is sensing Risk of an Event, they usually Buy in Large Quantities as they can't liquidate their portfolio and this is the only means to hedge. But this is not a regular affair. So who else Buys the Deep OTM Options ?

The margin benefits for option writers are so structured that if you Sell 25000 PE and Buy 24500 PE then they will end up locking lower margin. Hence you can imagine the rest of the chain based on their risk assessment, they will end up buying some strike and sell some strike, typically known as "Spreads"

Also the same applies for Ratio's Buy an Inner Hedge and Sell Outer in the ratio of 1:2 or 1:3 based on risk.

6

Derivatives / Re: Why PUT Options are Expensive than Call Options ?

« Last post by resh on December 17, 2025, 01:07:11 PM »

Many seasoned Option Writers who maintain 100 Cr Option Book are of the opinion that it is due to Large Institutions continuously hedging their downside risk that the PE option chain is more expensive and uniform as well.

Suppose Nifty is at 26,000 and somebody wants to hedge their risk, he'd have bought 26,000 and sold 25,000 based on the Delta of the Portfolio.

Remember that FIIs hold USD 900 Billion in Indian Equities but actively hedge just 10% of it around USD 90 Billion

7

CIBIL Credit Report Score / How Credit Score is Calculated ?

« Last post by resh on August 14, 2025, 10:41:52 PM »

Instead of the earlier two-year period, your CIBIL Score now factors in a three-year period when evaluating your credit behavior. Assessment of credit data over a longer period helps provide a more comprehensive overview of your loan eligibility.

The enhanced score also includes new credit attributes that gives lenders a more complete view of your credit behavior to help them make objective lending decisions, even if you have a short credit history.

The new enhanced score will substitute the current score in all products with a CIBIL Score offering.

Your CIBIL Score plays an important role in the loan approval process. Monitor your CIBIL Score regularly to be always loan-ready so that you have access to credit when you need it the most.

8

Derivatives / Nifty Upward Circuit - Sitharaman Candle

« Last post by resh on August 06, 2025, 11:16:14 AM »

On the 20th of September 2019, Friday, then Finance Minister Nirmala Sitharaman announced the change in Corporate Tax rate out of nowhere. No Hints, No Clues, just come and make an announcement.

The Nifty closed 5.32% higher on that day. VIX didn't rise much and was stable between 15 and 15.5
The next day Nifty went up higher again by 2.8%

If you were a leveraged option seller without any hedges, or stop loss, you're wiped out for sure on that day.

9

Derivatives / Why PUT Options are Expensive than Call Options ?

« Last post by resh on July 10, 2025, 10:24:23 PM »

Why are PUT Options more Expensive than Call Options - both equidistant from the ATM ?
Investors tend to buy more puts for protection against downside moves, which pushes their price and implied volatility higher. This phenomenon is known as the "volatility skew" or "smirk" in the options market, and it's a deviation from what the basic Black-Scholes model might predict (which would suggest equal implied volatilities for equidistant calls and puts).

But the crux of it lies in Put-Call Parity Relationship
P=C−S+K(e)^−rT

C: Call price
P: Put price
S: Current stock price
K: Strike price
r: Risk-free interest rate
T: Time to maturity in years (1 week = 7/365)

When I calculated using the above formula, didn't get correct values. Nevamind.
Theoretical models might suggest otherwise under ideal conditions, real-world options markets are influenced by supply and demand dynamics, market perceptions of risk (especially downside risk), and the practicalities of hedging.

Some argue that investor psychology plays a role. People are generally more sensitive to losses than gains (loss aversion), leading them to overpay for downside protection

10

Derivatives / What is Low VIX - Option Strategies ?

« Last post by resh on July 09, 2025, 01:02:14 PM »

A "low VIX" environment for option sellers is typically considered to be when the CBOE Volatility Index (VIX) is: Below 15
It's often associated with bullish or stable market conditions.

< 12   Very Low Volatility   Premiums are very low; poor reward for risk. Caution.
12–15   Low Volatility   Still low; limited premium, but slightly better than <12.

Now tell me what Option strategies are suited for the same ?