BC GENERICLEARNINGS
Saved by @SAnngeri

Why & how does rising Crude Oil hurt India?

A short thread 🧵

 India is the 3rd largest consumer of Oil at 5.35 million barrels per day (MBPD) behind US (21.2mbpd) and China (15.1mbpd)

India imports nearly 85% of its total Crude oil consumption every year.

India's own production has been below 700,000 barrels per day for a long time.
India imports oil in the following share as per FY 21 numbers:

Iran 17%,
Saudi Arabia 16%,
UAE 14%,
USA 9%,
Qatar 8%,
Others 38%

India import share for Oil from Russia is under 2%, an insignificant number.
India imports about 290 Million tones of Oil in a year.

Assuming that Oil prices are at $75 (last year),
India's oil import bill is ~ $165bn

India exports refined petroleum products as well. At $75 oil price those exports would amount to $58bn

=Oil trade deficit of $105bn
Oil at:
$100, India's oil trade deficit (imports - exports) would be ~ $140bn

For every $10 rise in Crude Oil from say $100, India's oil trade deficit will rise by ~$15bn

For instance at $120 Oil price it would be ~ $170bn
How does this impact India?

India's ex-oil Goods trade deficit at current run rate is likely to be ~$100bn,

At $100 Oil add $140bn to trade deficit and it totals to $240bn

$240bn is a large deficit number.

How does Balance of payment (BOP) stack up at this no.? Read on
Assuming India goods trade deficit at $240bn with Oil at $100

India is likely to have a surplus of ~$110bn on net services exports,

$80bn in inflows through remittances (NRI's sending money into India)

and India sees outflows of $38bn in primary income.
Let's total the current account now:
Goods Trade deficit -240bn
Services surplus +110
Remittances +80
Primary income -38
Total, Current account deficit: -$88bn

How do we cover this on BOP?
This gets balanced through financial & capital account:

India gets, on average, $45bn in FDI inflows;
+can get $10bn in FPI inflows totaling to $55bn

It also raises $25bn through ECBs & other short term loans.
Adding the changes in Banking capital ($5bn) and all above heads: $55bn + $25bn +$5bn = $85bn

So India's BOP can remain normal when Oil trades between $95 to $100.

What happens when Oil prices spiral?
For every $10 rise the trade deficit rises by $15bn,
Almost all the other heads do not move as quickly as oil deficit can. In that scenario it can become a direct headwind for India.

BUT, MOST Important point: Oil has to be at or above $100 for 12 months for this impact in nos
Two other areas of impact:

Inflation: For every $10 rise in Oil it adds 90bps to wholesale inflation and about 25bps to consumer inflation in India over a 12 month period

During a market correction, India's financial account can see FPI outflows which adds stress to BOP
What now?

-In case Oil prices trade above $100 for a few weeks and revert back below pre-conflict levels of $90, India will have minimal impact

-If Oil stays above $100 or say $120 for even 3 months or more, India's external situation will deteriorate
How does the crisis gets baked into the markets?

If there is a de-escalation / ceasefire, the Russian Oil & Gas will slowly come back to market and Oil prices will cool.

Russia O&G is suffering due to self sanctions by companies and it is yet to see full sanction by Govts.
Companies fearing western sanctions are taking it slow to do business with Russian O&G.

De-escalation will have to be seen in this context.

Also, most conflict when nuclear powers are involved tend to see some ceasefire rather than escalation. This needs to be monitored.
With a cushion of $635bn in FX reserves India can withstand short term volatility quite well.

But this ability can get challenged if Oil prices keep rising.

On the contrary, if this situation normalizes India stands to benefit a lot more than its peers. More on this later...

More from Sahil Kapoor

Sahil Kapoor
Sahil Kapoor
@SahilKapoor
The real estate market in India expanded at a CAGR of ~10% from $50bn to $120bn between 2008-17.

It's estimated to expand at a CAGR of 17.7% to $1tn by 2030. It will added $820bn in 10 years from $180bn in 2020.

Will throw a number of opportunities along the way.
REAL ESTATE
Sahil Kapoor
Sahil Kapoor
@SahilKapoor
@moneyworks4u_fa @shivaji_1983 @_gauravchopra Not just copper
SCREENERS
Advertisement
Sahil Kapoor
Sahil Kapoor
@SahilKapoor
Headline is a click bait, but nos are good.
Housing sales surge 113% in top 7 cities even as prices rise; massive 300% spike in Hyderabad

https://t.co/NODfkp3BxA
REAL ESTATE
Sahil Kapoor
Sahil Kapoor
@SahilKapoor
Why and when the markets stopped caring about the Russia-Ukraine conflict? A short thread🧵

The news coming in from Ukraine remains concerning with huge losses and humanitarian crisis.

But for the last 10 days the markets seems to 'Not Care' and react to the news.

Read why

Markets become very jittery if they can sense a large financial panic because of an external event.

One gauge to measure what the market is pricing-in is the funding stress indicator.

For instance, the FRA-OIS spread in US measures the funding stress in interbank markets.

The FRA-OIS spread, which measures the gap between the U.S three-month forward rate agreement and the overnight index swap rate, is an indicator similar to the TED Spread.

TED spread gained a large analyst following during the global financial crisis in 2008.

The FRA/OIS spread expanded from under 5bps to 38bps since Russia Ukraine crisis began.

The same spread had jumped to 80 from 10 during the COVID crisis scare before US Fed and other central banks stepped in.

Take a look at the graph.

What does this mean?


Equity, bonds and currency markets are most sensitive to problems in interbank markets. Why?

Because interbank markets runs financial markets to a very degree. From margin payment in f&o segment, to short term credit, to credit for economy ....
STOCKMARKET , MACROECO
Sahil Kapoor
Sahil Kapoor
@SahilKapoor
Why Gold could be 'The' asset to focus on and how to play it?

In 2021, gold hasn't done much. Its down 6% YTD. It was up a clean 20% in 2020.

What could be in store ahead. A thread 🧵 explaining drivers and way ahead.

There are 4 factors that are key to watch

1. Massive financial debasement across the world

2. Negative Real Interest rates

3. Gold's unique diversification edge

4. Incremental demand Vs limited supply

Financial debasement
US Fed's balance sheet has doubled from $4.2 trn to $8.4trn since COVID began. Similarly ECB, BOJ, BOE and EM central banks have embarked on massive monetary stimulus.

This was used to finance Govt deficit. This monetization/debasement is bullish for Gold.


Negative real rates
Gold prices follow moves in interest rates. Real interest rates are the nominal level of interest rates minus the inflation rate. Negative real rates erode the value of money. Gold being a store of value benefits from this...

Real rates are the most negative that they have been. Even junk bond yields have turned negative adjusted for inflation.
Gold moves inline with moves in real rates. With inflation still above normal trend and central banks likely to keep rates low, Gold is likely to benefit.
GOLD

More from Genericlearnings

Rahul Valand
Rahul Valand
@RahulTheVoyager
Thread :

Logarithmic v/s Linear scale chart.

Tried to capture the most important (but most ignored) concept in simplest language.

For many people, this is going to be an eye opener.

U may share this thread so that it can reach to maximum people of our traders community.

Story :

Assume that you have been recruited as an Engineer in 1990 in XYZ company with salary of 4 k.

Next year (i.e. 1991) you got 20% salary hike and now your salary is 4k + 20% % rise = 4.8K.

You got extremely happy due to salary increment of 800 INR.

Now after 30 years in 2021, Your salary is 1.2 lac and today your boss has approved salary hike of whooping 800 INR.

But wait, the strange thing is, You are not happy today.

Bt Why??

The reason is simple.

Hike of 800 INR in 1991 was 20% of salary and the same amount now is less than 1% of current salary.

I hope you got my point.

This is where the "Log" chart comes into the picture.

Log chart depicts the price (Y axis of chart) with unit spaced in percentage terms.

Means the distance between 1-100 is bigger than 1100-1200.

While in normal chart the distance between numbers/unit is uniform.

linear chart treats 800 INR in same way irrespective of year.
GENERICLEARNINGS
Tar \u26a1
Tar ⚡
@itsTarH
Prof. Damodaran is the OG.

Here is a playlist of his valuation class he teaches at NYU Stern.
The same lectures are recorded and uploaded for free for anyone to learn.

https://t.co/fraTT0gUUM

Education and Knowledge is freely available, just need to know how & where to look.
GENERICLEARNINGS
Advertisement
Pathik
Pathik
@Pathik_Trader
I always analyse 20 stocks but trade only 2/3 of them in a month.

I prefer to trade stocks which hits 52 week high/ATH.

Trade strongest stocks of the market.

Filter stocks which hits 52 week high/ATH after 1-2 months of consolidation.
GENERICLEARNINGS
Trendmyfriend
Trendmyfriend
@Trendmyfriends
A small note for the new Trader, this might help you.
Please have a look in your free time.
GENERICLEARNINGS
The Chartians
The Chartians
@chartians
Find out the answer for the question we asked today morning.
Here is the
GENERICLEARNINGS

You May Also Like

Sahil
Sahil
@sahilypatel
A list of cool websites you might now know about

A thread 🧵

1) Learn Anything - Search tools for knowledge discovery that helps you understand any topic through the most efficient

2) Grad Speeches - Discover the best commencement speeches.

This website is made by me

3) What does the Internet Think - Find out what the internet thinks about anything

4) https://t.co/vuhT6jVItx - Send notes that will self-destruct after being read.
ALL , LINKS , EDUCATION
Aditya Todmal
Aditya Todmal
@AdityaTodmal
MASTER THREAD on Short Strangles.

Curated the best tweets from the best traders who are exceptional at managing strangles.

• Positional Strangles
• Intraday Strangles
• Position Sizing
• How to do Adjustments
• Plenty of Examples
• When to avoid
• Exit Criteria

How to sell Strangles in weekly expiry as explained by boss himself. @Mitesh_Engr

• When to sell
• How to do Adjustments
• Exit


Beautiful explanation on positional option selling by @Mitesh_Engr
Sir on how to sell low premium strangles yourself without paying anyone. This is a free mini course in


1st Live example of managing a strangle by Mitesh Sir. @Mitesh_Engr

• Sold Strangles 20% cap used
• Added 20% cap more when in profit
• Booked profitable leg and rolled up
• Kept rolling up profitable leg
• Booked loss in calls
• Sold only


2nd example by @Mitesh_Engr Sir on converting a directional trade into strangles. Option Sellers can use this for consistent profit.

• Identified a reversal and sold puts

• Puts decayed a lot

• When achieved 2% profit through puts then sold
OPTIONSLEARNINGS , ALL , OPTIONS STRATEGY
Advertisement
Zen Black
Zen Black
@z3nblack
1/ Thread: "A Silicon Valley Ponzi Scheme"

Thanks to @chamath for laying this out in Social Capital's 2018 annual letter.

I've always appreciated his outspokenness.

2/ The hardest thing for most startups today is the path to market: first finding product-market fit & a way to reach customers, then building a ruthless machine to acquire, monetize & retain them.

3/ Because of this, when the VC industry invests capital into fast growing startups today, the plurality (if not majority) of invested capital will go into user acquisition and ad spending, for better or worse— usually worse.

4/ Todays massive venture-backed advertising, sales, and user acquisition playbook has morphed into one that champions growth at any cost.

This is creating a big bill that will soon come due...

5/ Ad impressions and click-throughs are bid up to outrageous prices by startups flush with venture money, and prospective users demand more and more subsidized products to gain their initial attention.
TECH , STARTUPS , {TEST FOLDER}
itrade(DJ)
itrade(DJ)
@ITRADE191
Here is the detailed information of about strategy,

Entry time : 9.30 - 10
Exit : Upto you

Strategy :
Sell weekly ATM CE & PE at almost equal price
For ex : Sell Nifty 17250 CE at 50 and Nifty 17250 PE at 48 so it will become short straddle

Buy monthly ATM or near ATM CE & PE at matching price (5-10 points diff should be fine) as hedge
For ex : Buy Nifty 17250 CE at 150 and Nifty 17300 PE at 155 so it will become long straddle.

Weekly Short straddle + Monthly Long straddle

Adjustment:

• If you feel slightly bullish/bearish then no adjustment needed
• If Nifty moves 50 up or down and sustain then just simply roll up or down half of qnty and keep rest of the quantity. If market goes up or down further then roll up or down rest.

• If Nifty moves one side or about to breach BEP then add equal amount of lot. This can balance tested side. For ex: If I bought 17300 CE 4 lot as hedge then add 4 lot so you will have only one side risk . Note: Remember to keep SL at cost price (only for additional lot bought)

Capital requirement:
2.2 L for 4 lot
Adjustment requires additional capital upto 1L

Note : High risk high reward strategy, please don’t execute until you fully understand. Kindly do paper trading or backtest.
RR : 1:1
POP : 45-55%
OPTIONSLEARNINGS , ALL
Pegasus of Dharma
Pegasus of Dharma
@HarduttSuhas
THE EVOLUTION OF OUR NATIONAL FLAG (1857-1947)

The INDIAN NATIONAL FLAG is not just a flag! It's a testimony of patriotism and seamless sacrifice. A symbol representing one of the oldest civilizations on this planet.

Let's hope what happened yesterday never repeats!

(Thread)


After the revolt of 1857, the first Indian flag was designed. The design was based on western heraldic standards with "Union Jack" in the upper-left quadrant and a "Star of India" enclosed in the royal crown in the middle of the right half.(1)


The flag was a symbol of the direct imperial rule in India.(2)

In 1904 the first Indian flag which stood for India's independence from the British was devised. The design was provided by sister Nivedita, an Irish disciple of Swami Vivekananda.(3)


The flag was red and yellow with an image 'Vajra' (weapon of god Indra). The phrase 'Vande Mataram' was written in Bengali on it. The red colour and the yellow colour signified freedom and victory while the symbol of vajra stood for strength.(4)
WORLD