BC TRADING
Saved by @Alex1Powell

Here’s me trying to make sense of the unprecedented 2020 bull rally of stock markets.

(A thread)

 1/ The simple answer to why stock markets are up is always that there’s more demand for stocks than supply.

So the real question is: why is there more demand for stocks?
2/ Actually, what’s happening is what should happen.

Central banks across the world, especially the fed in the US, are providing cheap liquidity across the board to institutions.

With interest rates falling to 0% and below, bonds are no longer attractive.
3/ The central banks are injecting this extra liquidity to stimulate economic activity.

They’ve made risk-free investments such as bonds so unattractive that the only place for money to go is towards relatively risky investments which are stocks.
4/ More than anything else, what central banks want is inflation.

They want things to become pricey so wages grow, profits grow and people’s perception of recession goes away because you’re getting more money than last year.
5/ Of course, it doesn’t work this simply.

Instead of inflation of wages and consumer products, we are seeing inflation of stock prices.

We are not seeing inflation of employee wages and consumer products because supply of these is more than demand.
6/ Instead what’s scarce by definition - stocks - is going up in price.

Central banks are underestimating how many people are needed to run economies these days.

It’s tech and tech causes decrease in prices for consumers.
7/ So no matter how much liquidity you pump, prices will not go up.

What will go up is stocks.
8/ But in a way, economy is doing what central banks want it to do: chasing riskier projects which hopefully will create more jobs in future.
9/ So when investors ditch the sureshot 0% return by a bank (that further invests in sureshot projects) to chase high-risk, high-returns gambles like Tesla, that’s exactly what central banks want.
10/ So when investors ditch the sureshot 0% return by a bank (that further invests in sureshot projects) to chase high-risk, high-returns gambles like Tesla, that’s exactly what central banks want.
11/ What’s most fascinating to me about the whole game is that it’s the *loss* making companies that’s getting their shares touch the moon.

Why?

https://t.co/xE9j8G2oQB
12/ I think the answer to it is beautifully put by this Redditor

https://t.co/7RTCJXaWlL
13/ Think about it: when interest rates are low, and the money you’re investing is something you *dont* want to consume today: you prefer future profits than today’s profits.
14/ You start preferring companies that reinvest all their profits at a >0% return vs returning you profits as dividends and you not knowing what to do with that money.
15/ This is why loss making companies are having sky-high valuations.

Nobody wants their money back at 0% interest regime.
16/ In that sense, “safe stocks” that return a healthy profit/dividend are more like 0% interest bonds.

You don’t want a dollar today. You want five tomorrow, even if that comes with a risk.
17/ I feel there may be a certain natural bias towards growth-oriented companies like Tesla.

When you invest in stock market, you really dont want to consume that money and hence naturally seek future growth over today’s growth.
18/ In nutshell: when there’s excess money in circulation, it seeks risk.

That’s what’s happening today (including bitcoin price rise IMO).

This looks like a long term trend. No central bank is willing to risk not risk taking.
19/ That’s it.

Hopefully that made sense.

If you have any other perspective or have read an interesting article on this, let me know.

More from Paras Chopra

Paras Chopra
Paras Chopra
@paraschopra
We may be alone in the 🌌 ENTIRE UNIVERSE.

(a thread on this bold conjecture)

🎉 It's also my 1st podcast episode https://t.co/7u2FskrhHi


1/ For my inaugural podcast episode, I interviewed @anderssandberg who is a senior research fellow at the @fhioxford.

I highly recommend listening to the entire episode. It's full of gems and insights.

But if you want key ideas, keep reading this

2/ Before we get to that, here's what we talk about in the hour-long conversation.


3/ Both history and science fiction shows us how the world can be dramatically different than what it is today.

4/ But exponential curves (like Moore's law) make it hard to predict the future because early on they look like linear
CULTURE
Paras Chopra
Paras Chopra
@paraschopra
Sugar was once promoted in newspaper ads as a healthy snack that helps save calories and prevents obesity.

Oh, how the tables turn.
SUGAR
Advertisement
Paras Chopra
Paras Chopra
@paraschopra
Difference between wealth and money.

(a short 🧵 thread)

1/ As the oxygen crisis during 2nd covid wave in India has reiterated,

wealth = *stuff* we want
money = *numbers* in our bank

2/ Being wealthy is a matter of priorities, while being rich is a matter of luck and hard work.

3/ Our happiness and well being depends on the wealth we have, not the money.

One can have all the money in the world and still be miserable.

However if one has sufficient wealth, happiness is guaranteed (partly because that’s how wealth is defined).

4/ Here’s how to be wealthy without spending a dime:

- Exercise regularly
- Develop deep relationships
- Help other people
- Eat healthy
- Meditate
- Learn and develop skills
- Laugh
PERSONAL GROWTH
Paras Chopra
Paras Chopra
@paraschopra
It’s a mistake to assume that open-minded people have weak opinions.

On the contrary, they are actually strongly opinionated because they actively seek evidence contrary to their beliefs which makes them converge on beliefs that are only updated if there’s compelling evidence.
PERSONAL GROWTH
Paras Chopra
Paras Chopra
@paraschopra
1/ Here are my notes from @robertwrighter's book - Nonzero: the logic of human destiny. I enjoyed the book very much.

The basic premise of the book is that history has a direction which favors co-operation and non-zero sum games, and that causes an increase in complexity.


2/ Starting from the first replicating molecule which co-operated with an outer layer to form first proto-cell, evolutionary and cultural history is full of examples where two entities come together to survive and progress a lot more than they would have done individually.

3/ This co-operative entity fares much better than two individual entities because of specialization. If two entities are in the same boat - that they win together or lose together - then trust is implicit.

4/ In a non-zero sum game, trust causes entities to focus on what they do best.

For example, eukaryotic cells - the ones animals and plants have - emerged when two proto-cells merged, and one took the role of energy generator (mitochondria), the other specialized in protection.

5/ Some scientists believe that even nucleus in a cell is a result of an early cell merging with another cell.

So M&A is not a recent phenomena, entities have been merging because of common interests ever since life started.
CULTURE

More from Trading

Yogeeswar Pal
Yogeeswar Pal
@yogeeswarpal
A thread.

Earnings Trades Simplified.

Earnings announcements are public announcements that display a company’s earnings, or lack thereof. As the earnings announcement gets closer, implied volatility tends to increase. After earnings are announced,...

1/n

the uncertainty of what will happen diminishes, and usually we see a rapid decrease in implied volatility because of it. Because of this phenomena, we tend to stick to premium selling strategies when it comes to earnings plays. We can take advantage...

2/n

of the implied volatility crush by selling premium prior to the announcement, and buying it back after the announcement.

Earnings trades are not for everyone, as they involve high amounts of uncertainty and random movements.

3/n


Why Trade Earnings -

-Increase number of occurrences, many trades available so increases of our probability of profit.

-High IV opportunities

-Short term Binary event leading to drastic volatility crush.

4/n

Factors to consider when placing earnings trade -

1. Expected Move
2. When to place trade
3. Historical Moves
4. Strategies based on market conditions

5/n
TRADING , ALL
Meet Shah
Meet Shah
@ms89_meet
Thread on "The Final Checklist"
by Peter Lynch.

~ Ideas can come from anywhere - Peter Lynch.


~ If you can't find any companies that you think are attractive, put your money in the bank until you discover some - Peter Lynch.


~ All you need for a lifetime of successful investing is a few big winners, and the pluses from those will overwhelm the minuses from the stocks that don’t work out - Peter Lynch.


~ Time is on your side when you own shares of superior companies - Peter Lynch.
TRADING
Advertisement
Jig's Patel
Jig's Patel
@jigspatel1988
Thread on Short straddle with adjustments:

Short straddle is non-directional strategy

Selling same strike price CALL/PUT option same underlying with same expiry.

Nifty Spot at 14353, So you can sell 14350 CE as well 14350 PE of 14 Jan. Expiry.

(1/n)

*RETWEET for max response

Bullish short straddle: Selling 14400 CE and 14400 PE of same expiry.

Bearish short straddle: Selling 14250 CE and 14250 PE of same expiry.

You can sell straddle as per your market view.

If you are natural view sell CE and PE at ATM strike.

(2/n)

Short straddle has limited profit potential (only premium) and unlimited risk without adjustment.

In Example, Short straddle of 14350, Breakeven is (14131.0-14569.0), need 1.7Lac Margin to sell straddle.
Maximum profit: 16k and Loss: Unlimited, Winning probability: 50%

(3/n)


If market staying near at 14350 then win. Probability increase slowly. Rewards also increase slowly.

Volatility(IV) is also play important role in selling straddle, Like If IV increase so straddle premium increase and IV cool off so premium casually comes down.

(4/n)

Short straddle adjustment:
https://t.co/59Lr64kEtK way to limit the overnight risk.
Convert short straddle in Ironfly, its nothing we have to add long strangle in short straddle it become Ironfly. It gives the good Risk Rewards.

(5/n)
TRADING
Greg Duncan \U0001f981
Greg Duncan 🦁
@GregDuncan_
Many traders have no consistency when sizing their positions.

The pros have this down to a science.

Here's my dead simple, 3-step guide to position sizing (and to outperforming 99% of other traders in the process):

Step 1:

Define how much of your account you're willing to risk per trade.

Personally, I never risk more than 1% of my account equity.

If I have $100,000 account, I will never risk more $1,000.

This ensures I will never blow up my account on one single trade.

There are successful traders who risk 2-3% of their account per trade, but I find it most calming to risk 1% or less.

The first step in this process is completely up to you - only you can dictate how much risk you can tolerate.

Step 2:

Look for entries & exits that are within 5% (preferably less) of each other.

This means if I buy a stock & have a 5% stop loss, I can put a 20% equity position on & still be risking 1% of my equity.

Your account will thank you w/ 20% in a stock that goes up 100%.

Step 3:

Position size using this formula:

Total equity (100%) / Trade Stop Loss %

So, if your stop loss is 4%, here's the math:

100% equity / 4% stop loss = 25% Equity Position Size

(assuming 1% equity risk).

Here's another hypothetical calculation:
TRADING
Aditya Todmal
Aditya Todmal
@AdityaTodmal
I gathered the best Youtube videos to learn Expiry trading for free.

If you want to master expiry trading, open this thread: 🧵

Collaborated with @niki_poojary

Here's what you'll find in this thread:

1. ATM strikes to zero
2. Big Gaps on Expiry Day
3. How to trade expiry when Nifty is behaving differently
4. Using Data points to trade expiry
5. Play for a flat move
6. How to profit post 3 pm exploiting the close price?

Let's go ↓

1. How to develop a framework to trade in ATM strikes on expiry day? Subhasish Pani on @vivbajaj Sir's channel.

One of call or put at ATM is going to go to zero.

Whichever is moving rapidly has a higher probability of going ATM/ITM. Sell the slower

2. How to trade a big gap up on expiry day?

If market bias is bullish and a gap-up happens, it comes for selling.

Can buy puts at the breakout of an inside candle as the market has a good probability of at least heading toward the previous day's

3. How to trade in Bank Nifty if it has already moved 160 points from its high to low by 11:30? @ThetaGainers

Sell near otms with double stop loss.

Avoid if stuck in a very small range.

Get out of both by 1
TRADING , ALL

You May Also Like

Tweeting Historians
Tweeting Historians
@Tweetistorian
@ChenHuailun here. I'm adding a supplementary thread before today's scheduled one to expand on the origins and early history of the Church of the East (aka the Nestorian Church) ~ahc #jingjiao 1/


The Church of the East traces its origins to the christological position of the School of Antioch, which held that the human and divine and human essences (ουσία) of Christ were united in a single prosopon (πρόσωπον). ~ahc #jingjiao 2/


This ran against the position of the School of Alexandria, which held that the two essences of Christ were united in a single hypostasis (ὑπόστασις). In general terms, hypostasis is more inherent than prosopon. ~ahc #jingjiao 3/


One implication of the Antiochene rejection of the hypostatic union is that Mary could not accurately be called the Theotokos, or God-bearer. Instead, she is the Christotokos, the Christ-bearer. ~ahc #jingjiao 4/


These Christological debates were further complicated by Syriac terms such as 'kyana' (ܟܝܢܐ), associated with 'ousia' but later translated to 'hypostasis' by Syrian Orthodox; and 'qnoma ' (ܩܢܘܡܐ), sometimes contentiously translated as 'hypostasis' or 'person.' ~ahc #jingjiao 5/
RELIGION
Anu Satheesh
Anu Satheesh
@AnuSatheesh5
Thiruvairanikulam Mahadeva Temple
Ernakulam Kerala🚩
#temples

Temple is known as Sabarimala of Women

Thiruvairanikulam Mahadeva Temple is situated on the banks of the Periyar River. Siva Temple has a separate sannidhi for Parvathi Devi which will be open only for 12 days a year


The Nadathurappu Mahothsavam happens every year on Malayalam month of Dhanu. On opening day, a grand procession starting from Akavoor Mana carries the ornaments of Devi to the temple. Swayamvara Archana is the main pooja here to clear the obstacle in marriages.
Legend is that 👇


Vigraham existed in another place called Iranikulam. A Namboodiri of Sreemoolanagaram used to visit the Iranikulam temple regularly. Akavoor Chathan, a boatman will take him to the Iranikulam temple and back. Because of Bhakthi of Namboodiri, Shiva traveled with him to his place.


Akavoor Chathan identified Siva chaitanyam and their family built a temple here. Parvati devi herself will cook Nevidyam here for Shiva, which was witnessed by a priest. Devi was angry at this and decided to leave the place. But when the priest offered his sincere apology👇


Devi blessed him and told that she will be present here 12 days in a year. Thus the period which begins from Thiruvathirai Day in Dhanu is known as the Nadathurappu festival.
Temple Nada opens today night.
Picture credit: Google.
🙏🕉🙏
ALL
Advertisement
Joey Tawadrous \U0001f1ee\U0001f1ea
Joey Tawadrous 🇮🇪...
@joeytawadrous
1) Core attributes of a promising founder worth following:
- Progress/trajectory over time
- How well they lead a team &
- Make the vision happen
- Most impressed when someone is way ahead of where you thought they would be when you check up/see them a few months later.

2) Indie Makers have such a benefit of being small, fast, nimble workers in comparison to big companies.

We can easily pivot and vastly change a project of ours. We can change as we learn more about our users.

Big companies can take months/years for even the smallest of pivots.

3) Before you find a product market you can pivot your project as many times as necessary until you find something that works.

Then you only have one thing to do: scale, scale, scale.

4) Be obsessed with the little details.
- listen to every single person who uses your product
- reply to every single person who emails you about your product
- ask them what they like and do not like
- iterate your product, make changes, pivot if necessary

5) Paul Graham's (@paulg) name came up with a feeling of great admiration! Naturally! It was Paul who said:

In the early stages of a company just;
- write code
- talk/sell to customers to stress test your idea

Nothing else.
STARTUPS
Aditya Shyam Jalan
Aditya Shyam Jalan
@Dr_Aditya_Jalan
A chartbook collection of 50 Examples from @Qullamaggie Sir's Swing Trading School.

https://t.co/kylxkesTmA

The entry points are marked with a orange arrow, 10,20 and 50 Daily Moving average are used and the commentary by @Qullamaggie sir is written on the chart itself.

The setups are breakout setups, where the stock makes a big move,
surfs (takes support) either on the 10,20 or the 50 MA,
Makes Higher Low's,
Forms a Tight Range with Narrow candles,
then
BREAKOUT's!!
QUALLAMAGGIE
Vibhu Vashisth
Vibhu Vashisth
@VIBHU_Tweet
THE LESSER KNOWN MAHARANA OF MEWAR:RANA KUMBHA
Kumbalgarh Fort is one of most spectacular sites of India,atop a hill abt 3600ft above sea lvl in the https://t.co/LkjmzzBhE2's second largest wall is surrounding it.A fort wall second only to Great wall of China,still not so famous.


This longest wall of India stretches to almost 36Km and encompasses a few hills, many step wells and over 360 temples and palaces. Birth place of the Great Maharana Pratap, this fort is named after another Great Maharana of Mewar, who is not given his due in the History.


Builder of many architectural marvels like the Kumbhalgarh Fort, an erudite scholar, a patron of arts, music, culture & a great warrior was the Great Maharana Kumbha. Yet we don't know much about him. Let's get to know him a little.


Maharana Kumbha was the undefeated King of Mewar from 1433-1468CE.He never lost any battles &kept Mewar out of the reach of Islamic Invaders till the time he was alive. Born on Makar Sakranti to Maharana Mokal & Saubhagya Devi, Rana Kumbha was only 13 when he ascended the throne.


His father was killed by his own relatives in a political conspiracy. He was a powerful King about 8ft tall &charismatic personality,a hardcore Hindu Rajput who could shed his life for Hindu honour without thinking twice.He was an ardent skillful warrior who never lost a battle.
ALL


Category Partner: Enkryptopedia