The WeekendInvesting Newsletter : 06 Nov 2023

Freshly Brewed - Market Perspectives from Weekendinvesting Research Desk

The gamification of the options market

The Indian stock market has witnessed a significant rise in retail investors dabbling in options trading. This trend has raised concerns among regulatory authorities, such as the Securities and Exchange Board of India (SEBI), who recently released a report stating that over 90% of people in the market end up losing money. This alarming statistic indicates a need for further analysis and potentially stricter regulations to protect inexperienced investors from making uninformed decisions in the derivatives market.

A recent article in Fortune India shed light on the dominance of derivatives trading in the Indian market. According to the article, a staggering 99.6% of market volumes are now in derivatives, with equity derivatives accounting for 99.6% of the trading volumes, translating to over $4.3 trillion per day. These volumes amount to . . . .

Are the US smallcaps showing direction for the near future?

The US stock market has been facing some challenges recently, particularly when it comes to the small cap index. In this article, we will take a closer look at the Russell 2000, the small cap index, and analyse its performance over the past few months. We’ll discuss its decline, the potential for a bottom formation, and the impact it may have on global markets.

Since Nov 2021, the Russell 2000 index has experienced a significant decline, falling from around 2500 to nearly 1600. This represents a loss of more than a third of its value. The index has been stagnant and uneventful, leading to . . . .

WeekendInvesting Daily Byte - 06 Nov 2023

Markets remained very strong, opening with a gap up and reclaiming the range by beating the 19,200 resistance at which it had closed in the previous session. The market closed at 19,400, showcasing a very nice recovery. This recovery indicates that the bottom is likely done for this next intermediate leg.

There are positive signs from several markets, including the US equity markets, the US high yield market, and the treasury market. These markets are experiencing a relief rally as the consensus now is that . . . .

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