EP07 Volatility Drops to 8s, Put Shorts Dominate – Iron Fly & Calendar Spreads for July 16

Welcome to EP07 of Trade Setup with Tanmay Kurtkoti, your 5-minute morning podcast before the chaos begins. In this episode, Tanmay dives into US inflation, market reactions, sector rotations, and option structures for expiry week.

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Top Highlights:

📉 Market Snapshot:

• Gift Nifty down 90 points, trading near 25,170 at 8:20 AM.
• Monday’s close: 25,195, minor bounce from lows.
• CPI surprise: US inflation rose to 2.7% YoY vs 2.6% expected → minor global jitters.

🌍 Global & Asian Markets:

• US Markets: Dow & S&P fell 0.2%–0.4%, Nasdaq up 0.2%
• Europe: FTSE, CAC, DAX fell 0.5%–0.6%
• Asia: Mostly green – Shanghai, Hang Seng, Jakarta, Taiwan all positive
• Non-correlation Alert: Asia up, Gift Nifty down.

💹 FII/DII Flows:

• FIIs bought ₹120 Cr in cash
• DIIs bought ₹1,555 Cr → Monthly DII inflow: ₹15,745 Cr; FIIs still net sellers: ₹11,778 Cr

🛢️ Commodities & Currency:

• Brent at $68.91 (cool-off from $70+)
• Gold: $3,327 – flat but showing strength
• Silver: ₹1,12,722 – strong buy zone
• Crude: ₹5,714 (neutral) | NatGas: ₹295 (buy zone)
• USDINR: 85.81 | DXY: 98.6 – strong bounce from 97.75

📊 Sector Signals (TK ALGO):

Strength:

• CNX Pharma
• Capital Markets
• FMCG
• Financials
• Auto, Smallcap, Midcap

Weakness:

• Infra
• CPSC
• Metals
• Nifty & Bank Nifty in neutral/sell zone

⚙️ Options & Volatility Setup:

• 17 July IV: 8.8
• 24 July IV: 9.49
• 31 July IV: 9.95
• Vols extremely suppressed → calendar spreads preferred

📈 Straddle Analysis (ATM 25,250):

• Premium: ₹142 → 1 SD range = ±124 pts
• Range: 25,050 – 25,350

💡 Strategy for Today:

• Nifty TK Signal: Sell from 25,438 (both slow & fast)
• Deploy Calendar Spread: Buy 24 Jul, Sell 17 Jul
• Iron Fly (25,250): 150-point wings for expiry trade
• Put shorts dominate: Clients have 3.45 lakh put shorts vs 1.03 lakh call shorts
• Suggestion: Hedge naked puts with OTM spreads

🔻 Crypto Watch:

• Bitcoin: ₹1,16,770 – weak zone, short opportunity

• Put-heavy client positioning may get trapped on open.
• Volatility is dirt cheap – ideal for calendars & Iron Flys.
• Watch for bounce back toward 25,300 zone by mid-week.

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