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Tips on What You Should Trade on a Budget Day


Budget is tomorrow 1-Feb-2019 please trade carefully.

Read this article to know what you should trade on a budget day.

Important for option traders:

Do not sell options especially if you do not know how to hedge. And if you buy options please keep in mind that India VIX will keep falling thought the day as the budget progresses so option prices will not increase the way they normally do. In fact if the move is slow then option buyers may suffer a loss even if the direction is correct.

Suggestion for Derivative Traders:

I would suggest directional traders wait for the markets to take a direction then trade. No one is forcing you to trade, it’s better to wait for the correct opportunity to trade.

But if you still want to trade then try the long strangle. Please keep your stop loss and profit target in the system not in mind.

Those who have done my bank nifty course may do the future and option strategy in financial stocks except HDFC bank or any other stock that may move due to effect of budget. Do not jump into a trade – wait for the budget to get over – try to know its effect on different sectors – then choose a stock and trade.

Suggestion for Stock Investors:

For people who only buy stocks I suggest wait for your favorite stocks to react to the budget news. Some will fall and some will gain. Buy the one that you feel comfortable with – but only after the budget is over.

If you already hold any stock make sure to buy ATM put to hedge against a huge fall. Buy a married put only if you hold more than 3 lakhs of the stock.

Hope it helps you trade well on the budget day.

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If you have any question you can contact me.

You can read about me here and my trading mistakes here.

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About the author: I started trading stock markets since 2007. However my first 3 years were losses. Then I dedicated almost 1 year on studying, researching, paper trading options and learned a lot in that time. Since 2011 I am trading Nifty options profitably. Call me if you need any help trading options on 9051143004.

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