NIFTY Options Trading by RAJ

[DanPickUp]

Or in other words: Do you have the terms

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Nothing personal: Just questions

 

[DanPickUp]

FII's are institutions which are permitted to participate in the Indian bourses despite being established or incorporated outside India.

Here is the list of all the FII's

Click on B and then C.... till Z to know each and every FII's name, address and telephone number!

Read this article. Its the best I have found on the net on FII's

If anybody here thinks FII's always make money, here is an interesting articles which I have read.

Its a three part article but it is very interesting for anybody willing to read.

Sorry: Cross over post and I will read it now.

 

[DanPickUp]

@Arcus and Taiki

What is your local time now as we already would call that: A nice trading discussion.

 

[arcus]

Sorry: Cross over post and I will read it now.

Its very important for traders to understand that FII's almost always trigger a medium term trend reversal.

Look at the statistics over here

In January 2008, they were the first to sell which triggered the biggest bear market in a decade.(while the DII's foolishly continued to buy)

In April & May 2009, they were the first to buy which triggered a massive bull run (while the DII's were actually net sellers)

In Dec 2010, Jan 2011 and Fed 2011 they were massive sellers triggering an intermediate term downtrend (as usual DII's were stupidly buying)

In Jan and Feb 2012, they were huge buyers again triggering a minor uptrend. (while DII's were as usual silly and selling)

But there is another deeper point here for anyone observing with some intellect. If the FII and DII bought simultaneously the markets would basically hit the upper circuit as we are not liquid enough to absorb such buying similarly,

If the FII and DII sold simultaneously we would continuously hit the lower circuit as we our markets are not liquid enough to absorb such selling.

The client and proprietary traders in India are not big enough to counteract the combined buying/selling of the FII's and DII's.


Once you understand this, its not difficult to understand why the FII and DII always take opposing positions and try to balance our markets to the state it is in currently.

All that said, Currently FII's are net sellers to neutral in the Indian markets. Without their participation, its impossible to be in an intermediate term uptrend.

 

[healthraj]

FII's are institutions which are permitted to participate in the Indian bourses despite being established or incorporated outside India.

For simplicity, just think of them as anybody who is not Indian but is in the Indian market (its not always that way, but you get the point)

Here is the list of all the FII's

Click on B and then C.... till Z to know each and every FII's name, address and telephone number!

Read this article. Its the best I have found on the net on FII's

If anybody here thinks FII's always make money, here is an interesting articles which I have read.

Its a three part article but it is very interesting for anybody willing to read.

Thanks Arcus. So who from your point of view is the market maker ?, Proprietary traders or the FIIs (Since the volume in Pro and FII seems to be huge)

 

[DanPickUp]

Its very important for traders to understand that FII's almost always trigger a medium term trend reversal.

Look at the statistics over here

In January 2008, they were the first to sell which triggered the biggest bear market in a decade.(while the DII's foolishly continued to buy)

In April & May 2009, they were the first to buy which triggered a massive bull run (while the DII's were actually net sellers)

In Dec 2010, Jan 2011 and Fed 2011 they were massive sellers triggering an intermediate term downtrend (as usual DII's were stupidly buying)

In Jan and Feb 2012, they were huge buyers again triggering a minor uptrend. (while DII's were as usual silly and selling)

But there is another deeper point here for anyone observing with some intellect. If the FII and DII bought simultaneously the markets would basically hit the upper circuit as we are not liquid enough to absorb such buying similarly,

If the FII and DII sold simultaneously we would continuously hit the lower circuit as we our markets are not liquid enough to absorb such selling.

The client and proprietary traders in India are not big enough to counteract the combined buying/selling of the FII's and DII's.


Once you understand this, its not difficult to understand why the FII and DII always take opposing positions and try to balance our markets to the state it is in currently.

All that said, Currently FII's are net sellers to neutral in the Indian markets. Without their participation, its impossible to be in an intermediate term uptrend.

Thanks for your nice reply

If you ever want to use your presented knowledge in any USA market, use the following link to start with: http://www.cftc.gov/About/index.htm

DanPickUp

 

[Taiki]

@Arcus and Taiki

What is your local time now as we already would call that: A nice trading discussion.

Right now it is 7:56 AM, By the time you posted this post, it was 7:36 AM

Regards
Taiki

 

[DanPickUp]

Thanks Arcus. So who from your point of view is the market maker ?, Proprietary traders or the FIIs (Since the volume in Pro and FII seems to be huge)

That is an easy question to answer for those who ever have been market makers and it has some times nothing to do with F.... and what ever you call them. Do never forget that.

Take care / DanPickUp

 

[DanPickUp]

Right now it is 7:56 AM, By the time you posted this post, it was 7:36 AM

Regards
Taiki

Means around three hours to me as here we have around 04.35. Yes that would be ok.

 

[arcus]

Thanks Arcus. So who from your point of view is the market maker ?, Proprietary traders or the FIIs (Since the volume in Pro and FII seems to be huge)

Prop traders are market MAKERS and FII's are market MOVERS.

Both serve their respective functions in our markets. Market makers provide liquidity and thereby serve to reduce the bid/ask spread.
Because their function is to provide liquidity its not hard to imagine why their volumes are so high.

If I bought 10 shares of ITC 100 times today, I'll contribute a volume of 1000 but actually I only have margin for 10 shares. Its akin to circular trading.

FII's function apart from providing capital for our economy is to determine the market trends. (from a technical standpoint).

FII's usually dont care much about price. Its important to note that FII funds dedicated to India are considered high risk for them to begin with.

Lets think like an FII for a moment. If I told you, you would get very high returns if you put your money in Somalia, would you do that. Sure you may but you are prepared that there is a chance you would lose that money.

The same mentality goes for FII's investing in India. In other words, when an FII invests in India, he basically thinks he has put his money in a high risk developing country. So if the economy worsens, they are willing to sell at whatever price without caring much about their P&L.

If FII's start by buy, they dont do so subtly. Their buying triggers a massive change in trend. So much so that it may cause a change in the trend itself.