S2Ep123 | I Called The Pin And It Landed Inside Three Points. I Also Told You To Buy Volatility And That Leg Lost 349. | Brent Went Vertical To 107.85 | The Nikkei Is Down Three Percent | 11th Sept Friday

I called the pin yesterday and it landed inside three points. I also told you to buy volatility, and that leg lost 349 points. And this morning Brent is 107.85 and the Nikkei is down three percent.THE RECEIPT, BOTH HALVES. I said we would open below 75,000, that it was max pain and the strike traders would try to reclaim, and that the magnet should hold it. We opened 74,742.54, the high was 74,910.96 so it came 89 points short and never reclaimed it, and it settled 74,902.59 while the final max pain on the settlement file was 74,900. Two point five nine points, the closest pin this show has put on record. Now the half that lost: the 74,800 straddle cost 452.35 the night before, the day's range was 312 points, and at settlement it was worth 102.59. A long straddle held to the close lost 349.76. Being right about where it settles and wrong about how far it travels is one call, not two, and you get both halves. Trading light is the only reason it did not hurt more.THE INDEX ROSE AND TWO IN THREE STOCKS FELL. The Nifty closed 23,477.80, up 46 points, but the cash market was 934 up against 1,667 down, the same advance decline ratio as the day before when the index fell. A narrow bounce on unchanged breadth, not a recovery. And every sector that worked on Wednesday failed on Thursday: banks led, IT stopped falling after exactly one day, while Adani Ports gave back to minus 0.39 from plus 3.80. Nothing led two days running.23,400 IS THE MAP. The both sides strike has walked 23,700, then 23,500, then 23,400 in three sessions, and the biggest call add of 38.76 lakh and the second biggest put add both landed there, 78 points below spot. Meanwhile 23,500 broke its symmetry: calls added 36.41 lakh while puts were taken off 18.01 lakh, so the put writers walked away and the call writers piled in. That turns a magnet into a ceiling. Max pain came down to 23,500, only 22 points above spot, which is what the Sensex magnet did in the two days before it pinned. One oddity: the biggest put add on the whole board was 34.28 lakh at 22,500, 977 points below spot. That is not a level, that is a tail hedge bought on a green day.OIL WENT VERTICAL. Brent settled 107.63 from 101.21, up 6.42 dollars and 6.3 percent in one session, and it is 107.85 this morning after opening at 109.05. WTI crossed 100 too. Three mornings ago it was 66 cents from 100 and named the risk that outranked everything. And Asia is in a rout: Nikkei down 3.06 percent, KOSPI 2.54, Taiwan 1.73, Shanghai 1.48, against a GIFT Nifty down only 0.49. Either we catch down or the domestic bid is real. The American ten year is 4.97, three basis points from 5 percent, and India has finally started to move with it. Gold fell to 4,326 and was downgraded back to bearish, which says this is a rates and supply trade rather than a fear trade.THE PLAN. GIFT at 23,346 puts the open at 23,290 to 23,340, a gap down of 140 to 190 points that starts us below both the band low and the 23,400 strike for the first time in this sequence. Reclaim 23,400 and 23,500 comes back into play. Fail it and 23,200 is next. Resistance 23,400, then 23,500, then 23,600. Support 23,364, then 23,200, then 23,000. Band 23,364 to 23,592. Three sessions to expiry, volatility has given back its spike to 11.72 and the 23,400 straddle is only 210, so this is a bad setup for selling premium and a thin one for buying it. Defined risk only if anything at all.Prior episode graded 4.5 on 5. Full scorecard on rupeecase.com.