Distressing Indian Tax Regime Keeps Inr at Stake

Overview: Bullish on USD/INRStrategy: Sell Put spreadTime frame: Short trend mostly on week’s targetWorthy set of trade ideas while trading USD/INR is shown precisely contemplating macroeconomic factors and political implications. The buzz is that the Finance minister of India Jaitley had explicitly stated in his recent union budget that the capital gains earned by foreign investors would not be levied any minimum alternative taxes (MAT), these categories would completely be exempted. However, he now clarifies the MAT policy originated earlier will prevail. As a result apparent sentiments of European and American investors are disappointed by Indian tax implications. This distressing news is not conducive for foreign institutional investors.In a technical chart it is clearly seen that there has been an apparent divergence between price and RSI curve. It is interpreted that this pair has over-reacted to the above news and likely to be properly priced in near future. The relevant significant points are shown as under the nutshell and relative trade strategies are formulated further, one can benefit from the swings in this currency trade

Let’s suppose, selling near month $10500 put contract costs $320 premium while buying the same near month $10000 put contract at $200, thereby the net credit would be $120

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