Hi All,
I am Abhijeet and I have a very unique experience. Assuming 99% of the people here are retail traders/investors, I have seen the world from the opposite side of the trades you take - i.e. from the institutional desk.
I have worked with top investment banking firms like JPMorgan and Morgan Stanley for an app that allowed any trader sitting anywhere in the world to trade on any stock exchange across the globe. Part of my job was to sit with 100s of top traders across the globe and understand their strategies/quant/algo/psychology and technically architect it through 1000s of hurdles from regulatory to code to algo to latency to dark pools to risk to smart routing to order management to profitability. A start to end FIX flow.
So this is how a typical trade looks like -
Little David (Retail Investor) - PCJEWELLER has dropped from 600 to 150. Every news channel and top moneycontrol boarders are screaming that it is a Satyam repeat and will be available pretty soon in single digits. Let me buy a PUT of strike price 100 and 150.
Big Goliath (Institutional Investor) - The total premium for strike price 150 CE and 150 PE is Rs. 60. That will cover a 40% move in either direction. There is a strong support around Rs. 100 looking at the trend lines and RSI has never been above 90 or below 10. There is a less than 1% probability historically that it will go below Rs. 94 at which point RSI 10 is a breach. Management is consistent and stressing on nothing wrong. The delivery qty of PCJEWELLER is at all time high. The volatility is all time high and book value is around 70. It should atleast give a bounce from 1.5 of book value - 105. I would like to deploy the Warren Buffet Cash secured put strategy involving writing on 150 PE/100PE + (150 CE to set off any panic selling to be sold if it goes to 100) for at 100 I would like to buy truck loads of it in equity and later pledge it for collateral margin. This looks pretty clean no risk strategy for expiry.
The rest is history. This is not to make anyone feel bad. But trust me! This is what we are up against. An average person doesn’t stand a chance against maths that always adds up - unless you invest in developing the same skills. Even if you are right - it will be once in a blue moon.
Are they smarter than us? Definitely not. Are they more educated than us? Definitely not. In fact most of them I met were major in Arts and many only 4th class pass. But they have got two things - 1) access to risk management tools that help them see through the clutter and noise and plan things accordingly. 2) temperament for trading. And that, my friends is the only difference. Not profit / Not leverage / Not greed / Not fear … but risk temperament is at the centre of all their ingrained thought process.
With that in mind, I wish to introduce Risk - Strategize Your Trades - Enabling Retail Investors With Institutional Risk Management Tools. This is just the first step. It won’t be easy. It will require you to traverse a huge learning curve for developing the risk temperament. Though your tool is right here. Broadly speaking - For existing trades, it helps you identify, monitor and control risk. For new trades, it helps you plan and strategize your trades.
Let this be the Sling (Your Risk Management Tool) - if you get the David and Goliath story context. If there is a risk out there that you can quantify, I am willing to add a module here and I genuinely wish to help you see through the risk analysis of every trade you make. The best part is when you manage your risk, there is no panic and you pull money like a magnet pulls iron.
I will add new features of Risk in this chain every now and then … Hope you enjoy it. Do share your thoughts … and I am happy to answer any questions.
Cheers,
Risk.Money
Glad you like it.
during first few minutes.