Heard on the Street

Operators build up positions before polls

Every market season has a flavour and the current one is the excitement surrounding the outcome of the general elections. Market sources said the flow of money into stocks in recent weeks has been part of the position build-up by seasoned operators before elections.

They said these operators are financially backed by a group of New Delhi-based brokers, with significant influence in political circles. In fact, conspiracy theory has it that a lot of personal wealth of politicians have flowed into the market in recent weeks. Brokers said bets have been based on the probability of every outcome in the general elections.

For instance, long positions have been created for a UPA or an NDA victory while short positions are for a Third Front, led by the Left. These operators would short the market, especially stocks of a powerful industrial group (which is known to be close to a rival political group), if there are indications that UP chief minister Mayawati would be the next Prime Minister of India.

Contributed by Jigar Pathak