What is a good return in FnO?

F&O
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Tom Sad GIF - Tom Sad Leaving - Discover & Share GIFs

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So, basically…

  • one needs to identify 10 stocks that move in a very narrow band of 2-3% per day
  • that reliably do so each day
  • in a mostly predictable pattern
    • according to some indicator that is correct 5 out of 6 times, 85%
  • that have sufficient liquidity/volume that one can enter/exit without slippage
  • and the 10 companies are fundamentally sound that one can hold them in the long-term and expect significant appreciation.
  • and one’s personal finances are such that one can hold such stocks without returns for years (if necessary).

With multiple independent “critical factors for success” involved in this “system”
i.e. independent points of failure,
this “system” sounds far from “zero risk”. :sweat:

Reminds me of this analysis of
why the Joker’s bank-heist in The Dark Knight (2008)
is a terrible terrible plan… :face_with_diagonal_mouth:

1 Like
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everyone has own opinions some believe in god some believe in ghost some believe in own i believe in my own

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@george1803 can you try to
describe the “positional monthly FnO trades” system with additional details
similar to how @VAMPIRE did in the recent messages in this discussion thread above?

That should enable folks on the forum to review it
who may have tried (or still pursue) similar strategies
(or avoid them due to the risks involved)
to highlight the risks they may have identified.

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I am not here to promote or prove any strategy. I believe in following one strategy with a good R:R ratio. I have one which I have been successfully using for the last years. It has given 24% ROI annually roughly, not including the capital growth of the underlying Liquid and Gilt Funds.
I am on this platform just to get an opinion on MY ROI. Is it good enough? The reason I need an opinion is because< i have a few friends who do FnO, specifically Option Buying. They show me the screenshots of lakhs and tell me that I should quit this slow approach and do option buying.
I know that these kind of returns are not sustainable or scalable. Which brought me back to the original question. Am I an idiot for following my system that gives me 24% Returns?
You pointed out that I made an ID just 3 days ago. It is true. I just wanted to participate in similar discussions and get a clear answer to my question.

Question again. Am I doing Ok?
Capital 50 L

  • Cash 10L
  • Liquid and GILT Funds 40L
    Pledge the 40L holdings and do positional monthly Option selling. (10L for Buy Trades- to hedge)

ROI - Roughly 28-30% annually ( including the Capital growth of the Liquid and Gilt Funds)

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Without knowing the risks involved in a “system” that has provided 24% returns,
the best response someone could provide would be - Possibly.

So you are not the kind of idiot that is attracted by promises to make a quick buck with no risk. That’s good. The fact that you were able to identify that certain strategies were not sustainable or scalable, does reflect positively on your ability to analyze risk.

However,

  • Have you been able to apply a similar level of diligence to reviewing your own strategy?
  • Have you identified the various limits of the strategy you have deployed?
    • Do you understand that your strategy is not sustainable or scalable in varying market conditions that affect returns and risks involved?

Good. You don’t have to promote any strategy.
If you want a thorough review, the more details you can share,
a more through review of the strategy would be possible
for interested folks to identify any potential pitfalls and respond here.

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I believe our views on R:R do not match. You assume that I do not have risk covered. Which I know is not the case. Thanks for answering all the other questions.

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Then please provide details to justify that assertion,
so that folks can

  • either highlight what you may have overlooked,
  • or provide confirmation that your risk-assessment is accurate.

IMHO, risk assessment is a weak-link in most strategies cooked-up by retailers/individuals,
as there is relatively less focus on that and the calculations are probabilistic/fuzzy.
(compared to returns, that everyone with access to a calculator and historical trading data/tools can model and calculate)

But, then again, if you aren’t looking for a review of your risk-assessment,
then fine, let us take your claim at face-value. :slightly_smiling_face::+1:

Here’s another angle from which one could review the strategy -

During the same period FY 2024-25,

Q1. What are the risks associated with investing in a basket of such Mutual funds
compared to investing in the strategy you deployed over the same period?

Q2. Also, how much time / mental energy did you end-up spending preparing and deploying your strategy compared to a “set-it-and-forget-it” mode of lumpsum or SIP investment in a handful of Large-cap, Mid-Cap, and Hybrid mutual funds?
Note: Doing this yourself may have also netted you some transferable skills as well,
compared to blindly investing in some MFs. That’s a “pro” in the “DiY investing” column of pros-cons.

Q3. At the start of the year, did your strategy have a positive-EV and one that was higher than the Large-Cap / Mid-Cap / Hybrid Mutual-funds at the same time, i.e. looking forward at the beginning of FY 2024-25 ?