個案資料
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Parliamentary Election Impact on Indian Capital Markets
內容大綱
On the eve of the announcement of the results of India’s 2009 elections, a senior research analyst with a leading brokerage and investment house in India was trying to predict the possible outcomes of the election and to gauge their impact on the stock markets. The analyst wanted to recommend some optimal options strategies to his clients, as the outcome of events such as elections always led to high volatility and consequently high risks and returns. The formation of a majority government would likely give a significant boost to the markets, while the formation of a coalition government would likely have the opposite effect. The analyst was struggling to determine the kind of strategy (aggressive or defensive) he should suggest. He was working to help his clients make exponential profits in a short span of time without the fear of losing significant money.
學習目標
This case unleashes the potential of options trading as a suitable instrument in high-stakes situations. It prepares students to explore options strategies as per their market intuition and to assess the performance of various strategies in different market conditions. The case is designed to be a reference case — one that instructors can use while teaching options strategies in derivatives or event trading in equity research, securities analysis or portfolio management. This practical case will help students assess the impact of events such as elections on the performance of capital markets, individual stocks and options strategies. Parliamentary elections are held every five years in India and have a considerable impact on capital markets. This case has been written for classroom discussion and is designed with practically implementable trading activities and strategies involving options, futures, equities and mutual funds. Students will gain familiarity with options strategies such as the long call, long put, short call, short put, bull spread, bear spread, short and long strangle, and short and long straddle.