Hedging against swings in Indian bank stocks suddenly looks cheap
Options traders are getting less skeptical about Indian banks after months of underperformance.
The cost of hedging against volatility in the NSE Nifty Bank Index is near its lowest level since January relative to the broader NSE Nifty 50 Index, indicating less demand for protection.
Meanwhile, the number of bearish options outstanding on the banking gauge hit a three-week low on Friday versus bullish contracts, data compiled by Bloomberg show.
Indian bank stocks have lagged the broader market, with sluggish deposit growth raising concerns that more regulation may be coming. While firms including Morgan Stanley remain bearish, Jefferies Financial Group Inc. says valuations already reflect the worries and a potential easing of liquidity could help smoothen the impact should interest rates fall. Demand for retail loans remains strong, and lenders including HDFC Bank Ltd., Kotak Mahindra Bank Ltd. and ICICI Bank Ltd. beat analysts’ profit estimates in the June quarter.
Stock Trading
Market 101: An Insight into Trendlines and Momentum
By — Rohit Srivastava, Founder
Stock Trading
Markets 102: Mastering Sentiment Indicators for Swing and Positional Trading
By — Rohit Srivastava, Founder
Stock Trading
Market 103: Mastering Trends with RMI and Techno-Funda Insights
By — Rohit Srivastava, Founder
Stock Trading
Market 104: Options Trading: Kickstart Your F&O Adventure
By — Saketh R, Founder- QuickAlpha, Full Time Options Trader
Stock Trading
Introduction to Technical Analysis & Candlestick Theory
By — Dinesh Nagpal, Full Time
