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Showing posts from March, 2009

Insights from the Options Pit: 'Vix'y 'Volcone'o

My posts seem to have a direct relationship with liquidity and credit availability in the markets... both have dried up! In this post I draw insights from the beautiful, non-linear world of Options. The title is a grammatical mess but it captures the central idea behind this post. I make a case for increasing volatility over the next two months in the Indian markets and possible ways for investors to play this. I'm am azed at the near-term thinking manifesting even in the options world. The markets are so riveted on the near month expiry that th ey forget there's a next month...and a month after that. India will go to elections starting mid-April and the spectacle will be for everyone to see over a 1 month period. As always, this time will most likely see tugs-of-word wars and plenty of ego-massages as one party tried to outdo the other in gaining the coveted majority number. Pre -election opinions point to a fractured mandate and there's a very high probabili