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YES Bank: What should a retail investor do now?

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Market is an ocean and there are many places to fish, you don’t have to get into troubled waters.

YES Bank: What should a retail investor do now?
The YES Bank stock has more than doubled from the lows at which Rana Kapoor sold his stake and that had given a great trading opportunity where the risk-reward really favoured taking a punt and many people made a lot of money doing that. And if you remember we had spoken about that potential trade on the channel. But what now? Is that trade over? Is YES Bank still a buy? Or is it going back to its recent low?
All I would say is for me the call on YES Bank is now simple: avoid it till it hits Rs 100 plus. Because all you need to be sure of is if the bank is going to survive. It needs capital for that and it needs it now. The problem with the fundraising contours YES Bank has announced is that a large chunk of this proposed investment is suspect and may not pass the RBI muster. And if that’s the case, you are better safe than sorry.
So between now and December 10, which is when we are likely to hear more on the fundraising plans, any bet on this stock is a gamble and if you gamble, you risk losing and if you are fine with that, it’s your call. Rest be assured if the bank survives and gets well-capitalised. It won’t matter if you got in at Rs 60 or Rs 80 because there is no brownie point for getting the bottom price.
One more point. The F&O positions in YES Bank are now above 91 percent of the prescribed limit and yesterday we saw massive build-up at 10 Put and 100 Call which clearly is being done to get the stock in F&O ban. Once it’s in F&O ban, remember you won’t be able to average it if you are playing it via options or futures.
Short point: Market is an ocean and there are many places to fish, you don’t have to get into troubled waters.
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