BC STOCKLEARNINGS

Sourabh Sisodiya, CFA
@sourabhsiso19 5 years, 8 months ago 1206 views

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#trading #youtube #markets

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Options Thread

How options allows to change and adjust view dynamically.
Let’s understand with a live example.

Example : Nifty is at 11921 and you are bullish on Nifty.

1) Buy Naked 11900 CE(call) at 167

Breakeven : 12068
Max Loss : Rs 12555
Max Profit : Unlimited

2) Now your view changes from bullish to slightly bullish so you can convert naked call into a bull call spread by selling 12100 CE at 72

Breakeven : 11996
Max Loss : Rs 7100
Max Profit : Rs 7800

#OptionsTrading #trading

3) Now your changes from slightly bullish to slightly bearish. You can convert the bull call spread into a ratio spread by selling more 2 calls of 12100 CE

Breakeven : 12224
Max Loss : Unlimited above 12224
Max Profit : Rs 18550

#OptionsTrading

4) Now if your view changes to sideways then you can buy 2 lots of 12200 CE to convert the ratio spread in a butterfly spread.

Breakeven : 11936 to 12182
Max Loss : Rs 2600
Max Profit : Rs 12300

#OptionsTrading

Sourabh Sisodiya, CFA
@sourabhsiso19

Trading Mistakes & Lessons Learnt 🧵

1) I always keep my mistakes & lessons learnt in front of my screen while trading.
Bcz we as traders tend to commit the same mistakes everytime.

So seeing your learnt lessons everyday ensures that you avoid them.

#trading #mistakes

2) In 2017, I analysed all my trades and saw that I have majorly lost in stock futures and profits came only via index trading.

I accepted that I am not great at stock trading & been trading index only majorly since then & have never missed a day trading BankNifty

3) I decided to adjust all of my past losses to 1 % of capital to see the effect of capping the downside.

I would have had a gain of more than 230 % if I had capped losses at 1% of cap.

Lesson: Keep losses per trade less than 1% of capital no matter what !

4) While trading index options, I lost sometimes due to IV rise,flash crash, and option freezes.

Lesson: Never take markets lightly & Always keep protective stops in the system (and not in your mind) to keep loss in control in case of blackswan.

5) Being an option seller, I have a tendency to manage my position by rolling up/converting to calendar etc.

So many times I have wasted 1 or 2 weeks just to close a loss making trade at cost😢

Lesson: I do manage now but exit as soon sold options become ITM or 2 x in value.

Sourabh Sisodiya, CFA
@sourabhsiso19

Thread: Risk hai toh ishq hai ?

1) A lot of people talking about today’s freak trade in 37100 PE in BNF

We as traders are always exposed to various types of risk and it’s a part of our business.

Let me highlight certain risk faced in past years & also ways to manage it

2) Gap Risk

18th may 2009

Markets opened at 9:55 AM as this was the market opening time at that time
Nifty immediately hit an 20 % upper circuit at 10.01 am and the markets froze.
So markets were open only for 6 minutes.

There are many such instances of overnight gaps

3) Vega Risk

On 24th August 2015, the Indian markets declined close to 5.92%.

Nifty around 490 points but something unusual happened on that day.

Far otm Call options shot up inspite of such a huge fall😲

Vix shot up 64%

4)Gamma Risk

26th sept 2019

It was an expiry day and 30000 CE went from 50 to 1000+ in minutes and eventually closed at 0

This move caused lot of leveraged traders to lose a significant amount of their capital
Many such instances of gamma risk on expiry day

5) Flash Crash

31st may 2019

Flash crash in Banknifty of 1000+ points.

Friday’s high of the Bank Nifty was 31,783 and the low point of the index was 30,623

Such flash crash has been seen in many stocks as well on other instances

Sourabh Sisodiya, CFA
@sourabhsiso19

Thread
How to manage strangles dynamically incase of a violent move or IV spike ?

1) Yesterday and infact entire last week if you had created strangles you would have experienced that during upmove only call side were increasing but puts weren’t decaying.

#trading #Options

2)In morning I had created a short strangle
200 lots 25000 PE sell at 102
200 lots 27000 CE sell at 161

You can sell from below image that if I had waited in this strangle till day end I would have lost around -4.5 L

So lets see what all adjustments did I do logically.

3)After creating strangles the premiums strarted increasing as puts were not decaying and calls were increasing.
So I had kept 100 lots buy on 26500 CE at 400(day high)
My buy got executed at 400 around 12:15 pm & I exited 25000 PE at 75

4) I had kept more 100 lots buy at 435 (recent high made during upmove till now)

The buy got executed at 12:15 pm
So my current open postions now were

200 lots 26500 buy at average 420
200 lots 27000 CE sell at 161

5) Logic:
As short strangles are basically short vol so if there is a movement on one side with no decay then one can start buying atm calls.
What this does is it converts your strangles into ratio spread and if move continues eventually into a debit spread

Sourabh Sisodiya, CFA
@sourabhsiso19

Thread 🧵:
A Day in the Life of a Trader (A day in my Life)

1) I absolutely love my work❤️! In fact, I grew up dreaming to be a trader. So trading, to me, doesn’t feel like working (except when I lose😂).
It’s fascinating because it’s different every day.

#trading #life

2)7:30 AM : Alarm Rings

A typical week day for me begins at 7:30 AM.
I spend the next 30 minutes on my daily chores — get ready for office, grab a quick breakfast & have a hot cuppa coffee.

3) 8:00 AM : Leave for office

On my way to office, I check what happened at the Wallstreet overnight & how are Asian markets performing.
I then look for any macro news that may affect overnight positions

P.S: We are moving to a new bigger office & will share pics of that soon

4) 9 AM - Connect with Trade Room members

I connect with trade room members on zoom & share my plan for the day, stocks to keep in radar & how to play the index & which option strategies to execute

For more details about Online Trade Room you can check

https://t.co/WrQPxhABsE

5) 9:07 - Pre Opening session

I keenly observe the pre-opening to get a general sense of where the market is it likely to open. At 9:07 AM, the pre-opening prices are out. I make a note of stocks opening with a big gap up or gap down and keep them on my watchlist.

More from Stocklearnings

Banknifty Addict (Gaur...
@BankniftyA

Long term bet & buy on dips candidate::
#3M india

gave monthly breakout after consolidating for 2.5 yrs approx.

Target atleast double within next 2 years.

The Chartians
@chartians

Here are the compilation of free educational contents we shared till now.

Kindly RETWEET and LIKE if you feel our efforts adding to your knowledge.

🩸Types of

There are 4\u20e3 type of #BREAKOUTS

1\u20e3 Breakout with no retest
2\u20e3 Breakout with a re-test
3\u20e3 Breakout with a hard re-test
4\u20e3 Failed breakout.

We Will Explain it one by one with examples. Kindly Retweet it if you find it useful. #Nifty
— The Chartians (@chartians) January 22, 2021

🩸 Detailed guide on TX, a free trading tool by

A detailed guide on #TX3 by @EdelweissFin

Software worth 50,000/- for F R E E \U0001f3c6

Scroll down \U0001f447 for detailed analysis
(Using for 2+years)

User guide PDF \U0001f4d9 https://t.co/Ke7Bn2jRO8 #chartians #momentum #StockMarketindia #trading #tx3 #edelweiss pic.twitter.com/6M7TCYpPLc
— The Chartians (@chartians) August 8, 2021

🩸 Fibonacci retracement and golder ratio - Part

\U0001fa78FIBONACCI retracement and GOLDEN RATIO - PART 2

Before we move forward, kindly like and retweet if you find our content is adding something to your knowledge. pic.twitter.com/HDlcOa5ZPP
— The Chartians (@chartians) August 8, 2021

🩸 Fibonacci retracement and golden ratio - Part

\U0001fa78FIBONACCI retracement and GOLDEN RATIO

Before we move forward, kindly like and retweet if you find our content is adding something to your knowledge. pic.twitter.com/iVC6W3pqks
— The Chartians (@chartians) August 7, 2021

Siddharth B
@T_Harth

#ADANIENT kaha jaake rukega?

- Next up Channel Top if crosses today's high so that comes to around 1250 - 1300 zone

Sumit Mehrotra
@SumitResearch

Here is the most respectable biz house

House of #tata

Biggest wealth creators #companies

It's a must read

$TheMillionaire \U0001f1ee\U0001f1f3$

TheMillionaire 🇮🇳...
@BornToBeSucceed

I'm working out on a Portfolio for 3 years and I feel it can provide 2x- 3x returns till March 2024.

I've covered 6 stocks today and working on 3-4 more Stocks. Though, I've checked each aspect but 👇

** You still need to keep a track of fundamentals every quarter**

#Stock No 1

#BlackRose Ind ( Chemical)

MCAP 829 Cr
Fundamentals 👌🏻
Technical 💪🏻

Already covered Business and Financial previously and can check again below. Stocks hasn't run up in recent

One more addition to the #Multibagger list:#BlackRose Ind: A consistent Performer in Chemical Industry.

Thread 1/1

Primarily in the business of chemical distribution and chemical manufacturing, as well as textile manufacturing and renewable energy generation.
— TheMillionaire \U0001f1ee\U0001f1f3 (@BornToBeSucceed) July 8, 2020

#Stock No 2

#IEX (Platform Business)

MCAP 10,162 Cr
Fundamentals 👌🏻
Technical 💪🏻

This is also covered preciously and can check detailed thread on below

A thread on #IEX and why you should invest..

Business: IEX allows participants to purchase electricity for the same day through intra-day contracts, for the next day through day-ahead contingency, on daily basis for rolling seven days through daily contracts and Weekly
— TheMillionaire \U0001f1ee\U0001f1f3 (@BornToBeSucceed) March 7, 2021

#Stock No 3

#Gland ( Pharmaceutical)

MCAP 39,447 Cr
Stock PE 51.9
ROCE. 30.2%
ROE 23.4%

**Major revenue comes from B2B
**Quality products
**Aim to file 20-25 ANDA each year
** Positive Management & great future outlook

#Stock No 4

#happiestminds ( IT)

MCP 7,675 Cr
Stock PE 53.7
ROCE 42.8%
ROE 83%

**Strong & experienced Management & Promotors
**OPM % has increased from 4% to 27% from Dec'19 to Dec'20.
**Significant improvement in Net cash flow
**Positive Commentry on Future outlook

Next level tactic when closing a sale, candidate, or investment:

Ask: \u201cWhat needs to be true for you to be all in?\u201d

You'll usually get an explicit answer that you might not get otherwise. It also holds them accountable once the thing they need becomes true.
— Erik Torenberg (@eriktorenberg) February 27, 2018

2/ First, “X” could be lots of things. Examples: What would need to be true for you to

- “Feel it's in our best interest for me to be CMO"
- “Feel that we’re in a good place as a company”
- “Feel that we’re on the same page”
- “Feel that we both got what we wanted from this deal

3/ Normally, we aren’t that direct. Example from startup/VC land:

Founders leave VC meetings thinking that every VC will invest, but they rarely do.

Worse over, the founders don’t know what they need to do in order to be fundable.

4/ So why should you ask the magic Q?

To get clarity.

You want to know where you stand, and what it takes to get what you want in a way that also gets them what they want.

It also holds them (mentally) accountable once the thing they need becomes true.

5/ Staying in the context of soliciting investors, the question is “what would need to be true for you to want to invest (or partner with us on this journey, etc)?”

Multiple responses to this question are likely to deliver a positive result.