October 18, 2016

Market outlook

Daily charts
- trend is up on EOD charts
- immediate support around 8500 levels
- today markets up almost 2%
- we had excellent AD
- 7% drop in VIX benefited option writers like me
- now expect resistance around upper trendline of falling channel.






5 min charts
- breakout from range was bullish
- cover at close




2 comments:

  1. kpl ji, how do use vix in writing option?

    advance thanks

    ReplyDelete
    Replies
    1. I don't actually consider VIX when writing options.

      However high VIX always benefits the writer (if trade is properly managed). This is because the premium increases as VIX increases but at the same time by expiry, the premium has to come down to zero.

      Also, it is normal that in times of correction or any panic, VIX shoots up but afterwards it comes down so the benefit goes to the writer.

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