Tagging @Nik to get an answer from him. Will ping him the link and ask him to answer a few Q’s.
Trading the markets with a certain % number in mind is quite flawed. I have hardly ever seen folks chasing such % returns actually making any money from the markets at all in the long run. The right way to look at the markets is to say that you will follow a trading strategy, be disciplined and follow all money & risk management rules. If luck is by your side, you could make 4% or more in a month and if luck isn’t by your side, you could lose that much or more.
There is no way to make fixed returns in the market, you need to invest in bank fixed deposits for that. Folks who peddle this idea of fixed returns from markets are misleading everyone else.
If u dont mind sharing, What route (option buying/selling) did u find best in ur personal trading journey ?
I have 2 questions related to ipo
Why Investers Sell Stocks immediately after the ipo is listed.
Most of the invester know that In Paytm company is not making profits. Again why they applied for ipo. Is smart money also applied for ipo and then now they also making losses?
Low risk fixed income type option strategy which @nithin you used in your journey.
How did Nik achieved fifty percent cagr with the size of capital he was managing. I am not concerned about the returns but how did he achieved this much in a institutional size book . If you can maybe share some insight on this. Thanks
Over the years I have written a bunch of posts based on my experience and there is one written by Hanan on my personal trading journey. Do check them out and remember that there is no easy money in the markets. Markets are a zero sum game and if you are trading derivatives and if you have to make money, remember that on the opposite side are some of the best folks with the deepest pockets.
The edge that a retail investor over a professional is the ability to remain nimble, which is to be able to enter and exit fast without losing too much money in impact cost. Also the retail investor unlike a professional one isn’t in a pressure to generate returns for someone else. To be able to come on top of this game over the long run, you need to leverage on the edge you have as a retail investor. So trade with as little, don’t put unnecessary % return targets which can anyways never be met, when in doubt exit, etc.
Most people recently are buying into an IPO for listing gains. This is because a bunch of companies over the last year have been giving that return and greed get people to follow what is making money. While Paytm lost money for IPO investors, Latent view made a lot of returns on listing. As long as there are listing gains, people will apply for an IPO with an intent to sell on listing. This is how typically bull markets play out.
It isn’t about Paytm alone. Most new-age businesses aren’t making profits and the way to evaluate these businesses isn’t on profits. I had written a post recently about this. Check out:
It is low risk, and not no risk. Even the lowest risk strategies have a potential to blow up.
About @nik, he held a stock portfolio which he pledged and used the funds to trade lower risk option strategies. The last 10 years has been a trending market, so the portfolio did well and also the volatility if you avoided or reduced your trading size on a few months, option strategies that benefit from lower volatility in the markets have generally made money. I made this sound easy, but it isn’t. Trading is a game of skill and to do well you need to have hit some type of genetic lottery, it is like a musician who hasn’t made it in life asking how can David Gilmour (Pink Floyd) sing and play the guitar as well as he does even though I practice much more than he does. Nik is one of the most skilled traders I have seen in my life. One of his biggest skills is to not be affected emotionally both when there are large profits or losses. At the end of the day trading comes down to how you behave when influenced by extreme greed or fear.
The size of capital has gone up with time, it wasn’t too large for many years. But it is quite large now and I don’t think it will be easy for him to hit 50% CAGR with the current capital he trades on.
I have sold ITC 200 PE last month which was deep OTM on expiry day. But my broker automatically squared off the position on last expiry day.I wanted to expire it worthless but due to squaring off I incurred some premium loss… when I contacted them they told all open options position will be squared off after 12 PM on expiry. Is it normal?
I guess you know that all stock options gets settled physically now. So what it means is that if any long put options expire in the money, you will need to deliver the stock. If you don’t have the stock and you are holding a put option (similarly holding calls without sufficient cash to buy stock), the risk goes up significantly for the broker. Brokers hence now ask for either bringing in cash or stock if you want to hold any long options to expiry.
But the above holds good only if the options expire in the money. On the expiry day, it is very tough to figure what can expire in the money and what doesn’t. At Zerodha if an LTP is within 5% range of the long option strike price and if the customer doesn’t have sufficient stock to deliver (for long puts) or sufficient cash to buy stock (for long calls) we square-off positions. This can happen anytime between 10.30 am to 3.30 pm.
Coming to your query,
The last expiry ITC was around 225 and if you were holding at 200 put option, it was >10% away from the strike price. If the broker squared off your position, maybe that was not required. But that said every broker has a different policy around this.
why do market open at 9.15 am and close at 3.30 pm ?
why not open at 9 am or 9.30 am ? why not close at 3.15 pm or 3.45 pm ?
I kept asking the same question through my school, why does my school open at 9 am and end at 3.30pm. There is no why to this.
It actually used to be 9.55 am to 3.30 pm until 2010. Timings were then preponed to 9 am because market participants wanted to have our markets open earlier to sync with other Asian markets which opens earlier. I guess the exchanges also had an incentive in terms of being able to generate more revenue by keeping the exchanges open longer.
In 2012 exchanges introduced the concept of premarket from 9 am to 9.15 am to reduce the volatility at market opening. Check this post from 2012, feels like I wrote this yesterday.
Is this regarding True Beacon or trading with his own personal wealth ?
Please tell us How to read the margin statement?
What are futures and options? How does one trade in them?
I have a query on the NSE Option chain publicly available @https://www.nseindia.com/option-chain
The above data is delayed approx 3 mins. Is there a paid feed only for this data from NSE which is realtime / near real time?
We can find ex-div date easily but not when the dividend would be credited.
So, where can we find the dividend payment date?
Check this post out
I’d suggest you learn the basics here first, Gaurav
It is generally credited after 45-60 days from the record date.