HOW TO SAVE TAXES IN TRADING AS AN INDIVIDUAL?

A THREAD🧵

In this thread I'll list down all the legal ways in which you can save taxes on the profits you earned from the stock market.

WHAT IS OPEN INTEREST, HOW TO ANALYZE IT AND DOES IT WORK?

In the thread I'll explain everything about Open interest and also all the tools used to analyze it and my personal opinion.

THIS IS THE ONLY THREAD YOU'LL EVER NEED ON OPEN INTEREST.

1: What is Oi?

Support if Mr A buys 10 lots of 17000ce in Nifty and Mr B sells 10 lots of call in Nifty then the total Oi on 17000 strike price will be 10.

So Oi is basically the number of outstanding contracts which are not squared off.

2: What is Oi used for?

Oi is only used to determine support and resistance on a particular strike price.

For eg: Nifty 16000pe has the highest Oi and 16200pe has to highest Oi.

So 16000 and 16200 level can be considered as good supports.

In the same way, 16500 ce has highest Oi and it can be considered as a resistance.

3: But why?

Highest Oi at 16500ce indicates that highest number of people have sold it BUT it also means that highest number of people have Bought it!

If 16500 acts as resistance, the option will go to 0 and all the buyers will lose money.

BENEFITS OF OPTION SELLING

Most of the successful traders here are option sellers.

Ever wondered why?

Why we have chosen option selling?

How to decide what strategies to use?

THIS IS THE ONLY THREAD YOU'LL EVER NEED!

Find out below

1: Theta decay

The biggest reason and one of the prime reasons is the theta decay.

Option sellers always have an advantage because the as time passes, the option premium falls even if the underlying instrument doesn't move.

2: Being wrong and still making money.

We as option sellers can be wrong with our market view and still end up making money because of the power of theta decay and adjustments to some extent,

3:Playing directional view

Option selling also enables us to take a directional view. Infact, directional view along with theta decay makes it a solid combination.

Debit spreads and credit spreads works great for a directional view.

4: Playing Neutral view

We can make money in option selling even if the market doesn't move as the otm options will go to 0 with the help of theta decay. It's the most fascinating thing.

HOW TRADING FROM A CORPORATE ACCOUNT CAN HELP YOU TO SAVE TAXES?

Since I myself have started trading from a corporate account recently, I'll share about my reasons for doing so and how drastically it can help to reduce taxes.

1: Save taxes:

The prime objective was only and only to reduce taxes. There's no other reason to trade from a corporate account.

2: Form a Pvt Ltd company : I've formed up a Pvt Ltd company since that's what I was advised by majority of the people including my CA as opposed to LLP/HUF.

3: Claiming Expenses: This is the most beneficial aspect of a pvt ltd company.

You can literally claim any expenses in the name of the company. Some of them are:

- Rent expense: You can literally claim your office rent as an expense. Your registered office can also be your own house where you live.

Further you can also claim electricity expenses and what not.

JESSE LIVERMORE is considered the greatest trader of all time.

He was the richest person in the world during his time.

I've read majority of his books and picked out learnings which are relevant even today with examples of the current scenario.

1: Remember that stocks are never too high for you to begin buying or too low to begin selling.

This principle still holds true today in trading, especially trend following.

Most people think if a stock has run up too much, then it's price is high and it will reverse.

But a trader should always be on the right side of a trend.

For eg: Asianpaints has been making new highs constantly, the major money would've been by the people who were on the right side of the trend i.e long.

Never buy it just because it has fallen too much. Instead short it and make money.

2: “Being a little late in a trade is insurance that your opinion is correct.”

It's okay to enter in a trade after you have received confirmation from the market.

Trading after confirmation will make your sacrifice your profits but it will also protect you against the loss

HOW TO DO SHORT STRANGLES TO MAKE 1% WEEKLY INCOME CONSISTENTLY?

I've made majority of my money by short strangles and I'll explain one very easy short strangle strategy which you guys can follow.

I'll also explain the adjustments and risk management.

1: What days it should be done?

It has to be done on Monday to thursday.

You can skip Fridays as there's negligible decay and big delta moves.

2: Preferred Instrument:

Banknifty will be the preferred instrument, since it's high risk and high reward.

Moreover it has good premiums.

3: Criteria:

It has to be done when Banknifty is inside a range on the 15 min chart.

As we can see here, it was June 6th Monday and Banknifty was in a perfect range, which makes it ideal for short strangles.

4: Positon sizing:

Although we'll hedge our positions but you strictly don't have to use the margin benefit which you will receive.

Ideal qty which be 6 lots on each side on a 10L rs capital and 3 lots on 5L capital

RANI NAIKI DEVI AND THE BATTLE OF KASAHRADA

Mohammad Ghori, the young Ghurid Prince conquered Ghaznavids in Afghanistan in the year 1173 CE. He conducted some successful raids into the Indian territory, which even Mahmud Ghazni & the Persians couldn't do.

First&foremost,Ghori invaded states of Multan &Uch in India.After this he turned to southern states of Gujarat &Rajputana.Everybody knows this about Ghori,but what most pple r unaware of is the defeat he suffered at hands of Chalukyan Queen Naiki Devi in 1178 Battle of Kasahrada.

When he marched southwards, his first target was the prosperous fortified town of Anhilwara Patan.
It was the capital of Chalukyas(also known as Solankis of Gujarat) which was established by Vanraj of Chapotkata Dynasty in 8th century.

American historian Tertius Chandler states that it was the 10th largest city in the world at that time. The history of Chalukyas has been written by many historians, but the valour of the Great Queen Naiki Devi remains unsung.

Born to the Kadamba King Paramardin of Goa,Naiki Devi was well trained in sword fighting, horse riding, strategy & every other subject of Statesmanship. She was married to King Ajaypala of Gujarat who sat on throne in 1171CE. Unfortunately,the King died within 4 yrs of his rule.

SRI MOOKAMBIKA DEVI, KOLLUR (KAR)

There was an Asura, Kaumasura, who was doing penance to please Shiva and get a boon. To prevent him from asking for a boon, Devi Saraswati made him dumb (hence called Mookasur)
Later, Adi Parashakti slayed him and came to be called Mookambika.

It is said that Adi Shankaracharya had a vision in which Devi agreed to follow him provided he did not look back. He kept walking and was assured of her presence due to the sound of anklets. When he reached here in Kollur, he turned back as the sound of anklets had stopped.

So Devi stayed here and merged with the lingam. The place came to be called Mookambika Kshetram.
The linga has integrated on it’s left side MahaKali, Maha Lakshmi and Maha Saraswathi and on the right side- Brahma, Vishnu and Shiva.

A swarna rekha (gold line) divides this linga into left and right portion. Adi Shakthi in this Udhbhavlinga form appears only here.
Devi sits in padmasana and has 4 hands.
Adi Shankaracharya installed the Sri Chakra in front of Devi and also composed the Soundarya Lahiri here.

ULTIMATE GUIDE TO 21 and 200 Moving Average
SUNDAY THREAD 🔖
A trend Following System That will Help You Improve Trading immensely.

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@kuttrapali26 @AmitabhJha3
#stocks #StockMarket
1/n

Moving averages
EMA and SMA
1. Exponential Moving Average (EMA) is similar to Simple Moving Average (SMA), measuring trend direction over a period of time.
2. However, whereas SMA simply calculates an average of price data, EMA applies more weight to data that is more current
2/

21 EMA : SHORT TERM TREND
1. Calculates the Average Price of past 21 days
2. A stock above 21 ema is in strong momentum , which will give pullbacks to 21 ema again and again.
3. Stock above 21 ema should never be shorted so as to stay with the trend
3/n

3. A stock which moves 10-15% above 21 ema will be too extended and hence will generally pullback
Stocks take dynamic support on 21 ema
4. You can Short only if its too extended like 15 to 20% from 21 ema ( Not advised )
#ADANIPOWER:
#pnbhousing
4/n

1. Whenever 21 ema is sloping upwards its called uptrend
2. Whenever 21 ema is sloping downwards its called dowtrend
3. Whenever 21 ema is sideways its called consolidation
⏫Buy in uptrend
⏬Sell in downtrend
Examples:
5/n

@buzz_chronicles @AchuthArora @Artofphysique_ @rattibha Ahoy!

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