InvestorQ : Should I jump in and start trading markets on election counting day or wait for the final outcome before taking positions
Archita Jajjoo made post

Should I jump in and start trading markets on election counting day or wait for the final outcome before taking positions

Answer
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Rashi Mehra answered.
1 year ago


In a nutshell – Keep your trading view and your investments in separate baskets

There are different ways to look at trading this market although trading purely intraday on 23rd May can be quite a challenging an risky affair. Electoral fortunes keep swinging and the market will also swing based on that. However, some of the basic idea that you are can follow can include buying strangles on the Nifty. Here you are only betting that the market will be volatile and you make profits irrespective of which way the Nifty moves. You can also look to buy stocks that are likely to benefit from a stable government led by the ruling party. You will get the trend by around 11 am and you can position your trades accordingly.

There are few things to remember about long term investing. Some of the India themes like consumption, consumer staples, financial services are likely to do well irrespective of which government comes to power. They are more dependent on the demographics and the rising income levels. Such stocks are unlikely to be really impacted by elections. Also, if you have a financial plan in place, don’t worry about making any changes to it just because the electoral fortunes are volatile. Over a 20-25 year time frame, elections have hardly made any difference to markets.