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New Delhi. There is a lot of turmoil in the market on the day the budget is presented. Especially a lot of ups and downs are seen in the stock market. On one hand, if people like the decisions or announcements presented in the budget, then the market goes up. On the other hand, if the announcement is not liked, the market falls. In such a situation, it becomes very difficult for the investors investing in the stock market and especially for the trader to earn profit.
To solve such a problem and to know the strategy of profit on the budget day, Moneycontrol talked to famous trader Manu Bhatia. He told that the budget day can be divided into two parts. Before the start of the budget speech till noon, the market sometimes rises and sometimes descends. At the same time, after the budget speech, the market either rises or falls. The reason for this is that from the announcement made in the budget, it is known that what will be the approach of the government.
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Bhatia said this while talking to MoneycontrolTalking to Moneycontrol, Bhatia said that this time the budget is going to be presented on Wednesday. That’s why a decline in premium can be seen. He told that the effect of two things will be seen. Firstly, as we move towards expiry in a week, the value of the options gradually depreciates and secondly, the VIX or volatility also crashes after the event. This increases the pace of decline in premium. Bhatia said that in such a situation it would be better to adopt a delta-neutral strategy like straddle or strangle.
BTST’s adviceHe further told that if there is a good trading move on the budget day and the index rises by one per cent or more, then it is expected to open in the same direction with a good gap. So if a good green candle appears on the chart, then it is a BTST (Buy today, sell today) opportunity.
It is difficult to take trading decisions on budget dayBhatia said that generally Bank Nifty shows good trading moves. The reason for this is that it is based on only one sector. If there are big announcements for banks in the budget then it rises or falls. On the other hand, Nifty is based on various sectors. I generally avoid trading unless I have a solid plan. This is because it is very difficult to take trading decisions on the budget day.
Position size is very importantWhen asked about the strategy of the day before the budget, he said that in 2019, I had not taken the right position in terms of size. I understood that instead of risking 1% of the capital, I was risking 3-4%. Although, I did not lose from it then, but I understood that the size of the position is very important.
Better decision to reduce position on budget dayHe said, “The second thing is that the premium is very high on such days. The reason for this is that there are a lot of expectations regarding the event. Therefore, I would not recommend taking positions in the size that we normally take. It would be better to reduce it. I reduce my position size by 30% on the budget day.”
(Disclaimer: The stocks mentioned here are based on the advice of brokerage houses. If you want to invest in any of these, first consult a certified investment advisor. News18 is not responsible for your profit or loss of any kind. Will happen.)
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Tags: Budget, budget session, business news, business news in hindi, finance minister, Finance Minister Nirmala Sitharaman, Nirmala Sitaraman
FIRST PUBLISHED : January 29, 2023, 06:59 IST
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