Intraday Currency Market Call

BUY EURINR 27th MAY 2020 At -- 81.68
Stoploss @ 81.5250  ::  Target 82.09

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BUY GBPINR 27th MAY 2020 At -- 93.75
Stoploss @ 93.58  ::  Target 93.99

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BUY JPYINR 27th MAY 2020 at -- 70.58
SL @ 70.46 :: Target # 70.9175

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BUY USDINR 27th MAY 2020 At -- 75.20
Stoploss @ 75.07 ::  Target = 75.44




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Buy Mindtree Ltd- Stock Recommandation

Buy Mindtree  Ltd.- Stock Recommandation
Buy Mindtree Ltd. in the range of 880-885,
Target: | 960; Stop Loss: | 829;
Time frame: 15 Days

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Bank Nifty Derivatives Strategy

Derivatives Strategy: Positional: Sell Bank Nifty April 20000 Put at 170-200, 
Target: 2, 
Stop-loss: 390, 
Time-frame: till April expiry  


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Positional Currency Call USDINR

Positional Currency Call: 
Buy USDINR May future at 76.10-76.30, 
Target: 77.80, 
Stop-loss: 75.35, 
Time-frame: till May expiry 



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Buy Colgate Palmolive - Stock Recommandation

Buy Colgate Palmolive in the range of 1500-1530,
Target: | 1735; Stop Loss: | 1408;
Time frame: Three months

Despite broader weakness, select consumption stocks have been witnessing continued buying interest and are
defying the market weakness on the back of strong resilience shown by sectoral heavyweights. A sharp decline in
crude prices also bodes well for stocks like Colgate. We believe the stock will continue its performance as it is approaching its life-time highs even in such a market scenario filled with jitters

Colgate has also seen significant closure in open interest during the market decline while the OI came down to 1.2 million shares from 3.5 million shares in February. However, it has started its up move after retesting its 2019 lows near 1100. Since then, its OI has increased sharply by almost 50% indicating ongoing long additions. As it has already moved towards its breakdown levels of 1500 seen in February, we expect it to move towards its life-time
high levels in the coming weeks

The major Call options base of Colgate was placed at the 1400 strike for the April series. As the stock has started trading above these levels, upsides are likely to continue in the coming sessions

The stock has seen major delivery based activity in January near 1300. Since then, it has failed to sustain above these levels. As it has started trading above these levels, we expect further buying momentum to be seen.

The stock was included in MSCI India in November 2019. Hence, in case of resumption of FII investment, it is likely to
witness significant upsides.

In the recent market weakness, Colgate had moved below its long term mean line but has moved above it once again.

Currently, mean levels for the stock are placed near 1300. We expect the positive bias to remain intact till it trades above these levels.

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Derivatives strategies - Long Asian Paints Future

Long Asian Paints (ASIPAI) April future in the range of 1805-1815.

Target: 1895;

Stop Loss: 1755

Consumption stocks have shown significant resilience and witnessed buying at lower levels despite negative market sentiments. Asian Paints is one such stock which has moved near its Feb levels while Nifty is still hovering around 9000 levels. The open interest in the stock has declined sharply at inception of the series. Despite gradual build up of positions, the total OI is relatively low ion the stock. We believe long positions should be formed in the stock and it is likely to move towards Feb highs in the coming sessions. The highest Put base for the stock is placed at ATM 1800 strike suggesting expectations of limited downsides.


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Nifty weekly outlook 25 April 2020

Nifty has broadly remained above crucial 8900 levels during the week which shows some resilience exhibited at higher levels. The currency also appreciated a bit towards the close of the week which supported the pullback from 8900 levels. FIIs selling has reduced significantly which has led to this consolidation. Buying is seen in sectors like FMCG and Pharma. The volatility cooled-off further to sub 40 levels which soothed the market sentiments. The start of result season has also led to more stock specific moves within a broader range of Nifty.

Technical Outlook
On the weekly chart, Nifty50 formed a Hanging Man pattern, potentially a bearish candlestick pattern. The index continued to consolidate within the prior week’s range while facing strong resistance at 9,350 level for most part of the week. The recent rally from the low of 7,500 has unfolded in the form of a Rising Wedge pattern, which was clearly evident on the daily timeframe chart, which is a bearish indication. A break below the 9,100 level will confirm the Rising Wedge breakdown and the index may retest the 8,800 level on the downside. Traders can initiate shorts for a break below 9,100 in Nifty50.

Bank Nifty -

Last week Nifty has managed to move and sustain above 9000 levels but under-performance was clearly visible in Bank Nifty which again slipped below 20000 levels. However, Bank Nifty traded in a broader range amidst high volatility. Sharp appreciation was seen in INR from its sizeable Call base of 77 with lower Crude Oil prices triggering positive sentiments for domestic equities. IV's have further contracted from 46 levels and it slipped below 40 levels which is a positive sign going forward. Absence of any major buying by the FII's in the cash segment are likely to keep the index move in check. Call OI blocks are seen in 20000, 20500 and 21000 strikes whereas Put OI base is seen at 18500 strike which remains the key support area for the upsides to continue. Rollover activities are likely to pick up which will trigger some intraday volatility going ahead.



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Nifty bank Put Option tips

NIFTY BANK  (OPT-CNXBAN-30-Apr-2020-18500-PE) 
Sale in the range of 200-210
Target 120/80
Stop loss 205

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Currency Tading at NSE FAQ

FAQ on Options on USD-INR Spot Rate

A. What are Currency Options?
Currency Options are contracts that grant the buyer of the option the right, but not the obligation, to buy or sell underlying currency at a specified exchange rate during a specified period of time. For this right, the buyer pays premium to the seller of the option.

B. What is the need for Exchange traded Currency Options?
The need for Exchange traded currency options arises on account of the following
reasons:
1. Options have the comparative advantage of maintaining a certain degree of flexibility in hedging, as, while protecting against a downside risk, they allow the
investor from profiting from favorable movements of the foreign exchange rates
by simply not exercising the option.
2. The exchange platform brings in all attendant benefits of transparency, finer
spreads, access, safety, central counterparty, etc.

C. What is the underlying for USD-INR options?
Underlying is US Dollar – Indian Rupee (US$-INR) spot rate.

D. What is the type of options?
USD-INR option contracts are Premium styled European Call and Put Options.

E. What is the trading hour and size of USD-INR options contract?
The trading hours are from 9 a.m. to 5.00 p.m. on all working days from Monday to
Friday and the contract Size is US$ 1,000.

F. What is the quotation of USD-INR options?
The premium is quoted in rupee terms. However, the outstanding position is in USD terms.

G. What is the contract cycle for USD-INR options?
The contract cycle consists of three serial monthly contracts followed by three quarterly contracts of the cycleMarch/June/September/December.

H. What is the settlement mechanism for USD-INR options?
USD-INR options contracts are cash settled in Indian Rupee.

I. Which day is the expiry/last trading day?
The expiry / last trading day for the options contract is two working days prior to the last working day of the expiry month.

J. How settlement price is derived?
The final settlement price is the Reserve Bank of India USD-INR Reference Rate on the date of expiry of the contracts.

K. Which day is the final settlement day?
The options contract would expire on the last working day (excluding Saturdays) of the contract month. The last working day would be taken to be the same as that for
Interbank Settlements in Mumbai. The rules for Interbank Settlements, including those for ‘known holidays’ and ‘subsequently declared holiday’ would be those as laid down by FEDAI.

L. How would contracts be settled at expiry?
On expiry date, all open long in-the-money contracts, on a particular strike of a series, at the close of trading hours would be automatically exercised at the final settlement price and assigned on a random basis to the open short positions of the same strike and series.

M. What is the Initial Margin levied in USD-INR Options?
The Initial Margin is based on a worst scenario loss of a portfolio of an individual client comprising his positions in options and futures contracts on the same underlying across different maturities and across various scenarios of price and volatility changes. In order to achieve this, the price range for generating the scenarios is 3.5 standard deviation and volatility range for generating the scenarios is 3%. The initial margin is deducted from the liquid net-worth of the clearing member on an online, real time basis. The sigma is calculated using the methodology specified for currency futures in SEBI circular no. SEBI/DNPD/Cir-38/2008 dated August 06, 2008 and is the standard deviation of daily returns of USD-INR futures price.

N. What is the Extreme Loss margin?
Extreme loss margin of 1.5% of the notional value of the open short option position is
deducted from the liquid assets of the clearing member on an on line, real time basis. Notional Value is calculated on the basis of the latest available Reserve Bank Reference Rate for USD-INR.

O. What is Net Option Value?
The Net Option Value is the current market value of the option times the number of
options (positive for long options and negative for short options) in the portfolio. The Net Option Value is added to the Liquid Net Worth of the clearing member. Thus, mark to market gains and losses is not settled in cash for options positions.

P. What is the Calendar Spread Margin levied on USD-INR Options?
A long currency option position at one maturity and a short option position at a different maturity in the same series, both having the same strike price is treated as a calendar spread. The margin for options calendar spread is same as specified for USD-INR currency futures calendar spread.
The calendar spread margin is calculated on the basis of delta of the portfolio in each
month. A portfolio consisting of a near month option with a delta of 100 and a far month option with a delta of –100 would bear a spread charge equal to the spread charge for a portfolio which is long 100 near month currency futures and short 100 far month currency futures.

Q. How premium paid by the buyer is settled?
Premium is paid by the buyer in cash and paid out to the seller in cash on T+1 day. Until the buyer pays in the premium, the premium due is deducted from the available Liquid Net Worth on a real time basis.

R. What is the Position Limit at Client level?
The gross open positions of the client across all contracts (both futures and options
contracts) not to exceed 6% of the total open interest or USD 10 million whichever is higher. The Exchange disseminates alerts whenever the gross open position of the client exceeds 3% of the total open interest at the end of the previous day’s trade.

S. What is the Position Limit at Trading Member level?
The gross open positions of the trading member across all contracts (both futures and options contracts) not to exceed 15% of the total open interest or USD 50 million
whichever is higher

T. What is the Position Limit for Banks?
The gross open positions of the bank across all contracts (both futures and options
contracts) not to exceed 15% of the total open interest or USD 100 million whichever is higher

U. What is the Position Limit at Clearing Member level?
No separate position limit is prescribed at the level of clearing member. However, the
clearing member ensures that his own trading position and the positions of each trading member clearing through him is within the limits specified above.


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Nifty Derivative call 24 April 2020

Sale NIFTY 50 (OPT-NIFTY-30-Apr-2020-9000-PE)

Sale in the range of 100-110

Market Lot: 75
Target: 75/ 45

Stop Loss: 145

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Today Nifty Call 23 April 2020

Nifty Apr futures contract (NSE)
Sale Nifty future in the range of 9215-9230
Market Lot: 75
Target: 9100/ 9000 Stop Loss: 9283
Support: 9014/8830 Resistance: 9301/9404


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Today Currency Call 23 April 2020

The dollar-rupee April contract on the NSE was at 76.55 in the previous session. The open interest has remained almost flat during the session

The rupee has gained on the back of softness in the dollar and expected inflows from the Reliance Industries and Facebook deal. However, till the rupee does not move below 76 levels, weakness is likely to persist

US$INR Apr futures contract (NSE)
Buy US$ in the range of 76.44-76.46 Market Lot: US$1000
Target: 76.85/ 76.95 Stop Loss: 76.25
Support: 76.25/76.15 Resistance: 76.85/77.95


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Today Currency Call - 22 April 2020

Today Currency Call - 22 April 2020

US$INR Apr futures contract (NSE)
Buy US$ in the range of 76.75-76.80 Market Lot: US$1000
Target: 76.95/ 77.10 Stop Loss: 76.70

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NSE BUY CALL Cadila Healthcare

The pharma space has come into the limelight in the last couple of weeks after multiple USFDA approvals were observed for Indian pharma companies. We believe the outperformance in this space will continue and current decline in stocks like Cadila Healthcare provides another opportunity to create long positions. Like most stocks, open interest in Cadila also reduced sharply during the profit booking in March. The stock witnessed more than 50% closure in OI since February as it has come down from almost 9 million shares to just 4 million shares at the inception of the April series. In the recent sharp up move, fresh open interest has been added but the total OI is still lower and is at multi-month lows.
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NSE BUY Call- Dabur India

The stock has been a major outperformer during the current market turmoil. It has witnessed a strong recovery in the last three weeks from the major support area of 380-400 being the long term demand line support joining lows since May 2017 and is currently placed at the cusp of registering a fresh all time high above 525 signalling strength and offers fresh entry opportunity. Structurally, the stock has almost completely retraced its entire previous four weeks decline (525-386) in just three weeks. A faster retracement of the last major correcting segment signals strength and a robust price structure.


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Today Currency Call - 21 April 2020

US$INR Apr futures contract (NSE)
Buy US$ in the range of 76.55-76.65 Market Lot: US$1000
Target: 76.95/ 77.10 Stop Loss: 76.35
Support: 76.35/76.10 Resistance: 76.95/77.35

Status- First target achived


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NIifty Weekly outlook 19-04-2020

Equity benchmarks extended gains for second week in a row amid firm global cues. Nifty ended the truncated week at 9267, up by 1.7%.Broader market outperformed the benchmark indices as Nifty Midcap and small cap gained 4% and 7%, respectively. Sectorally all major indices ended in green led by financials, Metals, Infra, Auto and Pharma.

The Nifty extended gains, on an expected line, as it formed a weekly bull candle with lower shadow indicating elevated buying support at 8800 mark, which is 38.2% retracement of most recent up leg (8055-9261). During the week, Nifty hit intra week high of 9324 thereby approaching in the vicinity of 9500 levels.

It is expect index to resolve higher and challenge 9500 levels, led by strength in global equities while progress on containment of COVID-19 will act as a tailwind. Major US benchmarks have retraced their entire fall already by 50% and showcasing further strength.

Hence if nifty sustained close above 9500 levels would further accelerate the positive momentum thereby leading Nifty towards psychological mark of 10000 levels over coming month.

In the process, we do not expect Nifty to breach a strong support at 8500 levels which is 80%retracement of last two week's up move (8361-9324). Thereby we advise investors to capitalise any dip from here on towards 8800 levels as an incremental buying opportunity, paving the way to challenge the upper band of consolidation of 9500 in coming week.

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Currency Market Overview

The currency markets have gone through a period of high turbulence amid Covid-19 fears. When emerging market currencies have declined 25-40%, Indian rupee has shown significant resilience and depreciated by a mere 6%.

This resilience of the rupee may continue due to improving macros in India. Also, as the RBI has been quite active and announced measures to curb rupee depreciation, the pace of rupee depreciation would remain quite slow. It would continue to outperform the emerging market currencies. USD/INR is expected some reversal from the crucial hurdle of 78.5, towards 75.5.

Key Highlights :-

Rupee has outperformed other emerging market currencies in the recent Covid-19 mayhem.

FII outflows of near 1,23,000 crore in both equity and debt segment has led to recent rupee depreciation. RBI has taken the bold step of selling dollars of more than $17 billion in a month, not seen in a decade

India macros to remain better as Crude Oil is expected to remain lower for longer time frame.

In the previous rupee depreciation cycles, whenever the RBI had started intervening, the rupee depreciation pace was reduced significantly. The same is expected in the current cycle where rupee is already outperforming major emerging market currencies.

It is expect that the US$INR to find strong resistance near 78.5. It could decline from these levels in the medium term towards 75.5.


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