Whenever #Nifty & #BankNifty closes less than -1% on Fridays, what happens on Monday and what happens on next 30 days. Interesting analysis, will be sharing the details shortly.

Only 7 times in last 11 years, #IndiaVix moved more than 15% on Fridays and only 2 times Vix dropped on following Monday, rest all the time Vix increased on Monday as well.

What is VIX?

Volatility Index.

What’s Volatility?

Expectation of the underlying’s deviation from what it is currently trading at. Assume underlying here as NIFTY Index.

If Nifty trades at 17,000, 1% volatility for 1 day means, expected to trade between +/- 1% 170 points.

1/n

Volatility Index.

What’s Volatility?

Expectation of the underlying’s deviation from what it is currently trading at. Assume underlying here as NIFTY Index.

If Nifty trades at 17,000, 1% volatility for 1 day means, expected to trade between +/- 1% 170 points.

1/n

Coming back to VIX.

So, VIX is computed as an index which trades on the exchange. Just like we have other indices like Nifty, Sensex, Bank Nifty, etc and has a certain rule how they are computed, similarly, there are set of rules and formulae how VIX is computed.

2/n

So, VIX is computed as an index which trades on the exchange. Just like we have other indices like Nifty, Sensex, Bank Nifty, etc and has a certain rule how they are computed, similarly, there are set of rules and formulae how VIX is computed.

2/n

VIX is the original concept of US, to be precise, CBOE (Chicago Board Options Exchange). India got inspired and created its own VIX, largely based on similar set of rules of CBOE, but a slight tinge of local flavour – as of course US and India markets are different, right?

3/n

3/n

Here's the first episode of #Enhance, this is going to be a series of videos every week @vishalmehta29 n me ll be discussing one specific topic related to Trading System which can be applied to your existing strategies that can enhance the performance.

@vishalmehta29 This is the second episode of Enhance, me and @vishalmehta29 discussed applying Martingale and Anti-Martingale in a Trading Strategy to enhance the performance of an existing trading system.

This is the third episode of #Enhance with @vishalmehta29, Do Trading Strategies stop working? Is your trading strategy going through the worst drawdown phase? Are you thinking if your strategy stopped working? Then this video is for you.

1 new chart everyday, it could be from any space ~ equities / commodities / crypto / forex / bonds , etc

Will try to do it daily 🙏💪

Here's the first one 👇

SBI vs BankNifty

Ratio chart has given monthly breakout implying SBI could outperform BN in coming months.

#PB365

Will try to do it daily 🙏💪

Here's the first one 👇

SBI vs BankNifty

Ratio chart has given monthly breakout implying SBI could outperform BN in coming months.

#PB365

Part 4: Understanding #OptionsBasic for #Nifty #BankNifty

In previous threads, we understood Intrinsic/Extrinsic value of options, how to achieve greek neutrality, risk management and how to define cheap or expensive options. Now

What Is Historical Volatility (HV)?

...1/n

In previous threads, we understood Intrinsic/Extrinsic value of options, how to achieve greek neutrality, risk management and how to define cheap or expensive options. Now

What Is Historical Volatility (HV)?

...1/n

@rohit_katwal Historical Volatility is a statistical measure of the dispersion of returns for a given security or index over a given period of time. This measure is calculated by determining the average deviation from the average price instrument in the given time period.

2/n

2/n

@rohit_katwal Using standard deviation is the most common, but not the only, way to calculate HV. The higher the historical volatility value, the riskier the security. However, that is not necessarily a bad result as risk works both ways - bullish and bearish.

3/n

3/n

Is it possible to predict probable Top and Bottom on #Nifty #Nifty50 using #INDIAVIX ?

Lets find out.

#INDIAVIX is a measure of market’s expectation of volatility over the near term. VIX is computed using the order book of the underlying index options i.e #NIFTY.

...1/n

Lets find out.

#INDIAVIX is a measure of market’s expectation of volatility over the near term. VIX is computed using the order book of the underlying index options i.e #NIFTY.

...1/n

@rohit_katwal VIX is denoted as an annualized percentage. Higher the VIX, higher the expected volatility.

When Nifty goes up, VIX reduces. When Nifty goes down, VIX increases. Its an inverse relationship. Why?

In my past tweets, I mentioned IV is demand and supply.

...2/n

When Nifty goes up, VIX reduces. When Nifty goes down, VIX increases. Its an inverse relationship. Why?

In my past tweets, I mentioned IV is demand and supply.

...2/n

@rohit_katwal Puts are bought as hedge. When fear is less in the market, demand of puts is less and hence prices are low and hence low IV which results in Low Vix. When fear sets in, market dips and demand for put increases with increase in IV, VIX increases.

...3/n

...3/n

#TradingQNA #Nifty #BankNifty #OptionsTrading

Q. What are some basic points that we must know before going for options trading?

Here are few pointers before you start option trading: -

1. Option Trading is a game of probabilities and money management.

...1/n

Q. What are some basic points that we must know before going for options trading?

Here are few pointers before you start option trading: -

1. Option Trading is a game of probabilities and money management.

...1/n

@rohit_katwal 2. There is no such thing as unlimited profit and unlimited risk in option trading. Unlimited profit is same as hitting a lottery and we all know what happens to lottery buyers. There is no unlimited risk if you know what you are doing.

...2/n

...2/n

@rohit_katwal 3. Buy Calls when bullish. Sell Calls when bearish.

4. Buy Puts when bearish. Sell puts when bullish.

5. Either put a SL to your trade or do a 100% hedge for risk-management.

6. Hedging is used to save your self from potential losses. Learn it.

...3/n

4. Buy Puts when bearish. Sell puts when bullish.

5. Either put a SL to your trade or do a 100% hedge for risk-management.

6. Hedging is used to save your self from potential losses. Learn it.

...3/n

What are your views on the daily chart of #IndiaVix?

I keep an eye on it alongside #Nifty. I will share my views also on how I plan to trade my carry forward positions based on it. Please post a chart with your logic.

I keep an eye on it alongside #Nifty. I will share my views also on how I plan to trade my carry forward positions based on it. Please post a chart with your logic.

What I see is #IndiaVix increasing from here. Not tomorrow. But as US elections are approaching, Vix will increase. Historically it does. During Indian General Elections, it went up to 30+ in anticipation.

It does not necessarily mean a fall, but a lot of volatile swings. 1/n...

It does not necessarily mean a fall, but a lot of volatile swings. 1/n...

...Furthermore, we had a 500+ point sell off which has turned us from sideways to bearish. Tomorrow being Friday, I am expecting a trap.

1. Vix is at resistance. So might be a bull day with an inside bar so vix cooles a but. Not conclusive of any thing but a bull trap. 2/n...

1. Vix is at resistance. So might be a bull day with an inside bar so vix cooles a but. Not conclusive of any thing but a bull trap. 2/n...

#Indiavix Mathematical Calculation of Indiavix explained in a more simpler manner:

1) Understanding Option pricing :

a) Option premium is a function of Underlying price, Time to expiry, int rates, Strike price and most importantly implied Volatility (implied standard dev).....

1) Understanding Option pricing :

a) Option premium is a function of Underlying price, Time to expiry, int rates, Strike price and most importantly implied Volatility (implied standard dev).....

....

b) All these factors are combined together in the form of BSM (Black Scholes Model) to arrive at the option premium.

c) Important thing to rem is BSM assumes implied vol (IV) as constant and hence for a given IV, premium is calculated....

b) All these factors are combined together in the form of BSM (Black Scholes Model) to arrive at the option premium.

c) Important thing to rem is BSM assumes implied vol (IV) as constant and hence for a given IV, premium is calculated....

d) In reality IV is not constant. Hence market practice is to decide on IV and then reverse engineer the option premiums; technically it is IV that is getting traded from which premium is derived and displayed. ( Sonething similar time ytm getting traded in ....

waiting for iv crash just like VIX need it in India Vix

best time for daring option sellers to make huge..

i have sold huge otm options..lets see

#vix

#indiavix

best time for daring option sellers to make huge..

i have sold huge otm options..lets see

#vix

#indiavix

This was best expiry as per me to sell option in last 1 decade.

On leverage selling huge qty and making big fat mtm is not a skill which i admire, identifying trend, understanding mispricing of option selling at correct time is something which i admire.. Havent seen anyone so far

On leverage selling huge qty and making big fat mtm is not a skill which i admire, identifying trend, understanding mispricing of option selling at correct time is something which i admire.. Havent seen anyone so far

With such sharp skill in last 12 years of trading journey... Only met amateurs who kept on boasting or chest thumping for being lucky..

#IndiaVix has risen by 13% today. This whole downside is because of #YesBank fallout which is a bit over reaction. #coronavirusinindia issue is still there. Fall like 350-400 point on Nifty is rare and has placed us at important support of 10800-11000 levels. 1/n

11000 can act as a base before further move to either side. Given we have 3 more days i.e. Monday, Wednesday and Thursday, I feel it better to do Iron Butter Fly.

Sell 11000 CE -1.

Sell 11000 PE -1.

Buy 11300 CE +1.

Buy 10700 PE +1.

#Nifty #Nifty50 #BankNifty 2/n

Sell 11000 CE -1.

Sell 11000 PE -1.

Buy 11300 CE +1.

Buy 10700 PE +1.

#Nifty #Nifty50 #BankNifty 2/n

Max Loss is 103 points. Max Profit can be 197 points if expire at 11000. But we can book any where near 100 points.

So on one lot that is a risk of 7700 and a gain of 7700-14000.

Join t.me/rkatwaltrading… for faster updates.

So on one lot that is a risk of 7700 and a gain of 7700-14000.

Join t.me/rkatwaltrading… for faster updates.

First 15 min candle in #Banknifty , 240+Pts move.

#VIX below 17 🤷♂️

Will explode sometime or market gonna quiet down big time?

#IndiaVIX #Nifty #Banknifty

#VIX below 17 🤷♂️

Will explode sometime or market gonna quiet down big time?

#IndiaVIX #Nifty #Banknifty