In my previous posts I have explained the reason on why I squared off my all positions in options as well as in portfolio when the banknifty reached to the level of 25000. I am waiting for the perfect time to re enter the market now I have kept my cash idle for the time.
How will I be entering the market now
As I am waiting for the right time to enter the market I feel the market is quite high on prices at the moment. As I prefer to invest in the banknifty my target price would be around the 22800 or lower and this time I will not be entering with my full cash but will invest little by little money on each fall.
Why have I chosen to invest at the 22800 price.
As per my own analysis I feel at 22800 there is strong support, that is the only reason for me now.
What if the price of banknifty don't reaches the 22800 price
I will wait and even I may park my idle cash on the liquid etf or Bharat bond to earn a little from there till the right time comes but even then if it don't comes any near to the 22800 I may take tiny positions from the interest earned from the liquid etf.
Why don't I sell the put option of the banknifty
I am still observing the market behavior and may be I would start selling the put option but still I feel covered call is the best strategy that could work for me and hence I am waiting for the right time and I may buy the banknifty etf to build the portfolio.
How is new margin policy is working for me
Honestly speaking the T+2 day rule keeps the margin blocked the exchanges and broker should work on settling down the stocks on the daily basis so that the margin amount do not gets locked for a longer time. As I will not be able to square off a position and start a new position immediately I will be waiting for the right time and price and also will be very very careful before entering for any trade. I feel the sebi will bring some changes for the existing policy.
This new margin rules is really impacting my decision to enter the trade, now I had to give a lot of thinking to decide when to enter and exit.
Conclusion
I will enter the market as per my plan with small amount this time and I will be very careful with the new margin rules so that in any case I do not get penalized for the shortage of margin. I will again create the positions to take the covered call strategy as I feel it is the most suitable strategy for me and this time I wont be selling the naked calls as I did last time which even caused me the loss and I totally loosed a good opportunity.
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