Pay me my VIX – India Morning Report ( Monday Pre Market Open 03/06)

Though the SGX Nifty has factored in all weekend heebie jeebies into the opening price, the increase in Volatility on Friday to 26-27 would indicate a likely rush to reach the “ultimate bottom” and shorts on Nifty seem to be controlled and careful while the buyers have been out in full strength at these prices even in 4900 calls now. At the worst it will be more 4400-4500 puts and 4700 calls. However, the week is crucial to determine india’s fiscal and monetary future. If it enters a bottomless pit behind these 4700 levels it will likely find more bananas than the precious investment which has already jumped to 3.5% from a contraction in the earlier quarter in the latest 5% growth shock

Consumer and Pharma remain very critically poised sectors as well. IT is more negative than positive and Banking is more positive but yet the pressures on the Sector are really higher even in quality like ICICI, HDFC, SBI and of coure the vulnerable axis under new management

Going back to the VIX, a higher VIX should mean higher returns on the Spreads, esp if you use Vertical spreads. Also cover asymmetrical strategies if you have sold calls

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