While most of us who have our savings in a bank or mutual funds with expecting a interest of an average 10 to 12% an year , can we imagine that 1 unit of currency invested turns out a 20 times profit value and within few hours of the day ! Little hard to image but stock market makes it happen , if a bet was on the profit end.
Today was a black day with Russia invading Ukraine with few of its troops which created a huge volatility sentiment across stock markets in the world with all major indices tanking between 4 to 5%. The Indian Stock Market NSE at the closing bell hit a 5% drop from the previous day . While it may one of the lucky days for a put option buyer or call seller , the other end put seller or call buyer may have wiped out a greater part of capital invested booking a stop loss, such was the volatility.
Below is a options table chart indicating how profitable were the option put buyers compared to the previous day . This is to indicate how profitable stock market could be if one bets on a strong anticipation
- Notice at the closing bell index ended at the money at strike price 16250 about nearly 900 points down from the previous day
- Those put buyers who may have anticipated the down fall and accumulated the out of money options had a bumper day. With just an investment of currency 30 on a premium , it turned out to a multi-bagger 600 by the end of the day