It's obvious there's a lot of manipulation happening in the Indian markets. But very rarely do we see such a classic example that allows everyone to understand what's going on.
Reliance declared spectacular results on Friday. Beat the street estimates handsomely. Everyone expected the stock to go up. But stock is under severe pressure!
What gives?
See the volumes in the Cash and Futures, and you get the picture.
Assume you are an institution having 20M shares of Reliance. If you sell all those shares in a hurry, obviously the stock is going to be under great pressure.
In Indian markets futures trade at much higher volume than cash. So it is easy to sell a lot of shares and push cash market down, while buying twice or more the futures at a lower price - because the stock is getting hammered.
Once you stop selling, the stock will shoot up. And you make your money on the futures!
And by selling cash, and switching to futures, you can get at least twice as much leverage and create much bigger positions.
The trick is to not be conned into selling into this dip, but to have the guts to buy.
The one who blinks first, loses!
Reliance declared spectacular results on Friday. Beat the street estimates handsomely. Everyone expected the stock to go up. But stock is under severe pressure!
What gives?
See the volumes in the Cash and Futures, and you get the picture.
Assume you are an institution having 20M shares of Reliance. If you sell all those shares in a hurry, obviously the stock is going to be under great pressure.
In Indian markets futures trade at much higher volume than cash. So it is easy to sell a lot of shares and push cash market down, while buying twice or more the futures at a lower price - because the stock is getting hammered.
Once you stop selling, the stock will shoot up. And you make your money on the futures!
And by selling cash, and switching to futures, you can get at least twice as much leverage and create much bigger positions.
The trick is to not be conned into selling into this dip, but to have the guts to buy.
The one who blinks first, loses!