When the corona virus made impact across the world , the global markets came down in terms of their valuations. No one was sure how long this situation will last and what will be its impact on the society.
Due to lockdowns accross many places there was a chaos.
Impact on Capital market
The impact of covid was there on the capital market too, various index fell from there top.
BankNifty which was trading around 32000 also fell down to 20000 and even went lower than this.
My Strategy
I just learned about the future and options and wanted to trade using that.
I purchased the Bank nifty etf and sold the call options of the higher prices , till august I was doing good.
But from that point of time the markets started rising . And for one of my trade I had to cut down all the holdings to avoid the losses from the call.
The bank nifty has outperformed and its value is more than 32000 now. I was not able to enjoy the profits as I was out when the banknifty was 28000. I sold the call option of 28000 and had to square off my holdings as when the price moved up from 28000 my calls were giving me loss and my holdings were giving me profits.
What now
As I was out from the banknifty and I feel the valuations are high, I have changed my strategy. Now I am investing for the stock specific.
There are some good stocks which still are at good price and I am building up the portfolio and soon will start selling the covered call for them. If I gets the profit I will buy the index etf from it and if I loose then I will be squaring off the portfolio and will move to other stock. This way I will be creating the portfolio of stock and index both.
Because of the new margin rule I have purchased liquid bees as well , they will give me some fixed income and these will be used to pledge and get the margin for option selling.
Further I will be sharing the progress in the upcoming post. Till then stay tuned.
