Its been a dream run, literally for the Indian Bourses. There seems to be no stopping the flow of money into the Indian stock markets, and as a corollary the sensex. This makes one wonder if the foreign fund coming in at this juncture is the smart money or the bigger fool!
The signs of a bubble have been there for a long time. But nothing seems to stop the money flow or the Sensex. The papers are filled with advertisements from Mutual Funds, Stock Brokers, Portfolio Managers and Analysts of all colors. The TV channels are filled with the news of the markets. The sign boards along the way welcome you to easy wealth!
Makes you wonder what will happen to the investors who have got in at these levels once the bull run ends? Hopefully for them the run might run for sometime to come. As it is said the markets can remain irrational longer than we can remain solvent.
All this leads us to the field of options trading. For us option traders the levels of the markets matter little, if and when the correction sets in we change our position and profit from the bear market. The flexibility and limited risk that options offer us makes us immune to the many side effects of a market bubble. In fact, we might make more money on the downside and faster than this bull run.
But that is something to write about once the trend changes for sure. For now there is no sign of a let up in the bull run and we stay bullish.
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