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Stock investments are best done for longer time periods, 1-month investment in equity is highly speculative.

Thanks
I was using 15 m charts

Hi Kartik, I was going through the link you have suggested. I have taken an example of a script kindly analyse and let me know if i am going in the right direction
Script ABC is trading today at 132 (underlying)
ABC call of 145/- is available at a premium of 2 rs (Market lot 5000) so investment of 10000/- for call option of 145/-
ABC call of 125/- is available at a premium of 11 rs (Market lot of 5000) so investment of 55000/- for call option of 125/-
Total investment in ABC call options = 10000+55000 = 65000
Lets assume that I buy both these options and at expiry the ABC stock closes at 135
so I make a 10 rs loss on the 145/- call (but maximum loss on this option is equal to the premium paid for this option i.e.= 10000/-)
& a profit of 10 rs on the 125/- call

So the calculations will be:
Investment on the premiums of call options = 10000+55000 = 65000/-
total profit on the call options= 5000 x 10 = 50000/-
net loss= 65000-50000= 15000/-

Am I going in right direction?

Sir
I am Prithwish Pramanick…Is that possible to earn daily on doing intraday or scalping in stock market??? And how that is possible??

@Karthik
In terms of trading strategies, what according to you would be the top 3 trading strategies

hi sir, my query is - we loose premiums in options because of time decay. i never traded futures, does futures instrument also loose points ?

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@Karthik When can we expect the listing of Zerodha. Recent listing of 5 paisa had a huge gap on BSE and NSE.

Hello @Karthik,

What are the main technical indicator that one should look for long term holding?

This is beside checking fundamentals

Thanks
Naveen

@Karthik Is there a way I can join your prop desk and trade for you guys.

hi,@karthik my question is related to investment size in small cap stock .position limit is 1% of free float capital .if i want to invest around 30-35 crores in stock having free float cap. around 1k crores.will i be able to buy it from open market in couple of days of trading? correct me if i had some incorrect information.

Hi Kartik, I was going through the link you have suggested. I have taken an example of a script kindly analyse and let me know if i am going in the right direction
Script ABC is trading today at 132 (underlying)
ABC call of 145/- is available at a premium of 2 rs (Market lot 5000) so investment of 10000/- for call option of 145/-
ABC call of 125/- is available at a premium of 11 rs (Market lot of 5000) so investment of 55000/- for call option of 125/-
Total investment in ABC call options = 10000+55000 = 65000
Lets assume that I buy both these options and at expiry the ABC stock closes at 135
so I make a 10 rs loss on the 145/- call (but maximum loss on this option is equal to the premium paid for this option i.e.= 10000/-)
& a profit of 10 rs on the 125/- call

So the calculations will be:
Investment on the premiums of call options = 10000+55000 = 65000/-
total profit on the call options= 5000 x 10 = 50000/-
net loss= 65000-50000= 15000/-

Am I going in right direction?

For 145 CE -

You have paid 2*5000 = 10K. Stock closes at 135, hence this option expires worthless, you lose the entire premium paid. So a loss of 10K.

For 125 CE -

You have paid 11*5000 = 55K. Stock closes at 135, hence this option expires with an intrinsic value of Rs.10. Since you have paid Rs.11 as premium, you will receive 11, but you’ve paid 10 so, your net loss is Rs.1/ or Rs.5000.

You would have been profitable if the spot had closed at 125+11 = 136 or higher.

So net loss is 10K + 1K = 11K.

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This is possible provided you do the following -

  1. Get a holistic view of the markets - both from a fundamental and technical perspective
  2. Set realistic expectations for the rate of return
  3. Develop a trading strategy
  4. Backtest this strategy
  5. Stay disciplined
  6. Understand and manage risk well
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My personal favorites are -

  1. Shorting options before events
  2. Relative value trades
  3. Delta hedging

I will be explaining these in detail in Module 10 of Zerodha Varsity.

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No, futures is a very different compared to options. In futures, the only thing that matters is the direction of the trade. However, in options besides direction, time, speed of the market, volatility, and interest rates matter.

Your guess is as good as mine :slight_smile:

Frankly, for long term holding, only the fundamentals matter. There is no point looking at any technical indicators.

The prop desk is fully staffed at the moment. Any hiring will be internal, Lakshmikanth.

This would be nearly 3% of the market cap. You will have to phase your buy and spread this order across multiple days, Rahul.

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Hi Karthik,

I have this doubt. Today being the F&O expiry day, market opened very low. Just wanted to know why this is having impact on the actual stock price, as
!)If they are in profit/Loss in Futures, they would ideally close their positions., Will F&O expiry can impact actual stocks so much.
2)How do Mutual Fund/FII see F&O expiry. If my understanding is correct, they wont trade on F&O. They can only cover their existing positions.
Can you throw some light on this:slight_smile: