Post Date: 26-Sep-2019
One decision to lower corporate tax by Finance Minister Nirmala Sitharaman by a few percentage resulted in huge jump in stock markets.
The News: On Friday, September 20, 2019, Finance Minister Nirmala Sitharaman announced a reduction in the country’s effective corporate tax rate from around 35% to 25%. For companies that do not avail of any other incentive or commission, the effective tax rate would be just 22%.
This will save a lot of money of the companies doing business in India and of course will result in better profits, which in turn will result in business expansion and creation of jobs. Its a very good news for Indian economy.
Of course a news such as this results in a jump in stock markets. From Friday to Thursday, 26-Sep-19 NSE went up from 10700 levels to 11600. This is an increase of 8.5% approx.
Bank Nifty went from 26757 to 30400 levels. This is an increase of more than 13%.
See this one month graph of Bank Nifty:
In such a swing and volatile markets such profits are possible in 1 or 2 days in my Bank Nifty Course Strategy:
During these volatile times traders must be very careful. Especially if you are a future traders or an option seller you must maintain your stop loss levels.
There is no better adjustment than taking a STOP LOSS.
Traders keep asking me one question that what is the best adjustment strategy for a future or an option short trade gone wrong. They think that there is an adjustment strategy that can work wonders and bring a losing position to winning position after the adjustment is done.
Let me tell very clearly. The more you try to adjust a losing trade, the more you will go deep in losses.
After seeing an option shorting gone wrong, traders adjust the position by shorting another either the same option or a deep OTM option.
This is a very wrong way to adjust a trade.
The best adjustment in a losing trade is to get out of the trade.
There is nothing better than this.
So be careful when a major news has come out. This is the time to reduce your lot size, take a less risk and trade.
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Dilip Shaw, Founder
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