Budget day trading strategy: What should Nifty traders do on D-Day?
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Whether the stock market ends higher or lower on Budget day today, volatility is likely to be higher than usual as in 12 out of the last 14 instances, Nifty has shown intraday fluctuations within a 2-3% range. "A common trend observed is that the Implied Volatility (IV) of Options rises in the days leading up to the Budget but subsequently declines sharply during the speech. Given this pattern, instead of adopting a directional strategy (delta-based approach), traders may find implied volatility (vega-based) strategies more profitable, capitalizing on the expected IV crush," Sujit Modi, CIO, Share.Market, said. Also read | Budget & stock market: Why odds of Sensex, Nifty rallying are high after D-Day Back testing data shows that Short Iron Fly and Short Iron Condor strategies are the most consistently profitable, succeeding in 13 out of 14 instances, he said. Share.Market’s trading strategy for Budget day: Maximum profit per...