≡ Menu

When to Short Stocks Nifty or BankNifty


One of the best ways to short stocks, nifty or banknifty is on a bad news. I am a great fan of bad news. See this chart of PNB after the news came out of the Nirav Modi scandal. The Punjab National Bank scam came to light on 14 February 2018, and since then it has been a downhill ride for the Indian Banking community especially PNB – Punjab National Bank.

See the downhill chart of PNB from the news came out:

PNB Stock Chart 13-Feb-18

The downhill continues for months for PNB:

PBN on 18-May-18

It is almost certain that a stock will fall heavily when bad news hits the company. Resignation of a top manager, employee specific scandal, tax hiding getting caught (like Satyam), any illegal activity – even a small illegal activity will take the stock down by 5%.

Remember the Axis Bank scandal during demonetization in 2016? See this how Axis Bank fell from 490 to 432 in about a month:

Axis Bank 8-Nov-16

Then it started to go up slowly.

Basically when a bad news is hit it is almost certain that a stock will fall heavily. However when a good news hits, the stock may rise approx 5% only.

Why this happens?

Because fear of losing money spreads very fast and people take out their money as soon as possible without even reading the news properly. But when a good news has come in a company, people start reading the newspapers to verify the news, try to figure out the outcomes, start seeing business channels – by this time the smart investors (HIIs and DIIs) have already bought the stock in huge quantity – they know very well the late comers (retail traders like you) will join the party at the top of the hill – this is the time they start to sell.

Who loses? Retail investors.

However if you track how a stock behaves to bad news vs good news you will see that impact of bad news is much higher than the impact of good news.

The scandal of Punjab National Bank broke out on 14 February 2018, but the stock has not yet come out of the shock of the bad news till now.

PNB stock falling since the news of scandal

So when to sell a stock?

As soon as a bad news hits the company. Read newspapers looking for bad news in any company and see if there is derivative trading allowed there. If yes do not waste time in shorting the stock. Of course this can be risky. If the management comes out with an announcement to counter allegations, then the stock may rebound within seconds of announcement. Therefore it is very important to hedge your traders to make sure that the risk is minimized.

In my Nifty and Bank Nifty course you will find strategies where you can learn hedging and also get strategies to make monthly income consistently without worrying too much about your money and the direction of the stock. Wherever the stock goes you can make a profit.

Please like & share my blog with your friends:

Hi, I am Dilip Shaw, owner of this website. I am a trader like you. I have been trading since 2007, but lost a lot of money till 2010. I then stopped trading and studied options like college exams. Started trading again from 2011 and never looked back since. I did a lot of research, read books and did countless paper-trading before being profitable. You can read about me here.

My conservative trading course since 2014 is helping many retail traders just like you who have a job or business make consistent profits like this:

What Traders Say About This Course
Testimonials Year 2015
Testimonials Year 2015 Page 2
Testimonials Year 2015 & 2016
Testimonials Year 2016
Testimonials Year 2017
Testimonials Year 2018
Testimonials Year 2019
Testimonials Year 2020 to 2023
What People Say Just After Reading My Course
Emotional Testimonial by a Young Woman Trader and Her Mother
One Of My Client Is Making Rs.25k Per Week
Difference Between Other Courses And Mine
What Others Charge for Courses

You can do this course from your home. Some traders make amazing profits like Rs. 16.26 lakhs profit in 5 days though results may differ for all.

This course helps you learn to trade conservative option strategies for monthly income. Once you finish the course you can start trading immediately. You can start trading from any day. No need to wait for expiry. You will make profits consistently.

This course is good if you have a regular job or business. You DO NOT NEED to monitor your trades every second.

What You Get?

Before reading please understand that for all 5 strategies, strike selection will be taught. Strike selection while trading Options is the most essential part to succeed.

You get two conservative non-directional strategies on options, one conservative stock option strategy and two conservative directional strategies on Future & Option combination.

Non directional trades are profitable 80% of the times and make 3-5% per trade (Results may vary).

Directional strategy makes money fast. It does not matter which side the stock moves. In fact you make more when you are wrong in the Future trade. 🙂 Some amazing profits possible here.

The stock option trade makes 30,000 in one trade and if SL is hit there is a way to recover losses plus make 30k in that trade.

Technical knowledge is NOT required. No need to monitor trades every second.

In the course you will learn how to select the strike prices. You learn when to trade, which strikes to sell which to buy, how much profit target you should be looking for, the best place to take stop loss and what to do after taking stop loss – means how to get that money back. The success rate is more than 80%.

Since trades are properly hedged there is no stress in trading my strategies.

I am very confident that you will make money trading my strategies. To help you succeed I offer few months support for FREE.

11 Reasons Why You Should Do The Course:
1. TA Knowledge NOT required
2. NO Software Required
3. Regular Monitoring NOT Required
4. Continue with Your Job
5. Do Course From Your Home
6. 100% Hedged
7. Stress-Free Trading
8. Not too much money needed to trade
9. Scaling Possible
10. One Time Fee
11. FREE Support For Months
To know more Call/SMS/WhatsApp me on 9051143004 or email me now. I know English and Hindi.

Read the details of the course here.

If you want to enroll for the course you can do so here.

P.S: So many years of trading has thought me one thing - it is always better to make small profits month after month, rather than lose money month after month trying to make too much money. It never happens. But small money accumulated month after month can become very big in only a few years.

Privacy Policy | Disclaimer

WhatsApp or Call me: 9051143004

If you have any question you can contact me.

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

TheOptionCourse.com Copyright @ All Rights Reserved
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. In other words I am a sub-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.

Risk To Reward Ratio Explained
How To Use Volume To Trade Stocks

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.

{ 0 comments… add one }

Leave a Comment

Social Share Buttons and Icons powered by Ultimatelysocial