We have been discussing what to do to shape our trades for a better economic worth out of the expected moves. Today, we will discuss what not to.
Well as a monthly event for most of the underlying stocks & indices, Expiry changes a lot of equations and is capable of a momentary upsetting a well-established order. We will raise caveats four possible distortions in the aftermath of an expiry day.
The Nifty50 rose 7 percent in the November series, the biggest gain in a derivative series in over two years.
Expiry of futures and options (F&O) contracts do have implications of 2 sets of participants. One being the directional participants who would be evaluating whether or not their view would carry forward and others being the non-directional set of participants who would be evaluating certain price equations between instruments quoted for the next expiry.
Now either one of these sets would unwind their positions or carry it forward. While carry forward may not have so much of impact on the underlying, the unwinding may create a lot of noise which the underlying does not deserve.
Source:https://www.moneycontrol.com/news/business/markets/nifty-rose-7-in-november-series-here-are-the-donts-of-post-expiry-trading-3241201.htmlIf you need more information about the Stock Market:
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