2019 Indian General Elections are due to be held in India between April and May 2019 to constitute the 17th Lok Sabha. Its obvious that a lot of speculative trading will happen from now until the results are declared. In fact for one month after the results are declared there will be volatility.
See this movement of Nifty last six months from October 2018 to February 2019:
Nearly 1500 points drop from Sep to Nov 18 and then 1000 points surge in next 2 months. This is volatility. A 500 points up and down in a few months is considered stable stock markets – but 1500 move points is above average volatility. Be prepared for this for next few months.
So if you are a directional future trader life is going to be very difficult. You will never know when stocks or index will take a turn – I can only say be very careful with your traders.
India VIX will also be not stable so any guess work based on India VIX will also be futile.
Therefore you must learn to hedge any trade you take. Learn to limit your loss first – Profit is secondary in trading. Not making a huge loss ever is Primary.
Here are a few things you can do before the General Elections:
- Some stocks that were at their peak in August 2018 are now available at a discount. You can buy 3 or 4 companies’ stocks from different business sectors for short time of 3-4 months. If there is a run up to elections these stocks may perform.
- India VIX will keep increasing 30 days before the election start date and will drop after the results are announced. So if you are an option buyer you should take a long view not trade intraday.
- If you are an option seller be ready for slow premium decay due to increasing VIX at least until results are declared.
- If you are a future trader its going to be very though to find direction – even if you are right the stock may change direction at the drop of hat. Reason is pretty simple. Politicians will speak something in media and you will see its effect on the stock markets. The effect will be on a sector not on individual stocks. So its better you exit on small profits.
- Commodity trading also will be very volatile. Most political talks are on commodities so its price may get affected. You will see this volatility in commodity markets too.
Its better to be safe for next few months. So exit at small profits – do not leave money on the table. Do not regret even if you could have made more. These are the times when keep your losses in check is more important than trying to make good profits.
You Can Read More On My Site
Save Money on Options and Futures TradingTraditional brokers take away a lot of money by charging high brokerage in each lot traded, however this broker does not charge for each lot. If you trade 5/10/100 lots in a single order they charge only Rs.20/- for each order traded irrespective of lots being traded at different times. Same for exiting. If you exit all 5/10/100 lots in a single order your total brokerage comes to Rs.40/-. And they do not charge anything for buying & selling stocks. It takes 5 minutes to open an account online. Click here and Open Free Account with them today >>
Dilip Shaw, Founder
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 am an Authorized Person (AP) of a Stock Broker. I do not give tips or advisory services by SMS, Email, or WhatsApp or any other forms of social media. I strictly adhere to laws of my country. I only offer education for free on finance, risk management & investments in stock markets through the articles in 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 in this website. I am not responsible for any investment decision you take after reading any article in this website. Click here to read the disclaimer in full.