Many traders usually buy OTM options near the day end, especially on expiry days, with Hero or zero mentality. Seeing certain volatile movements at times, they think such OTM trades could give exponential returns when market make some significant movement during the last hour.
Either they buy Out of the money put options and expect market to crack big time or Out of the money call options and expect market to move up much higher, sometimes people buy both put and call. (Long Strangle)
So we gathered the last 10 years historical data of Bank Nifty and analyzed their last 30 mins #Intraday movement, that is between 2:45 PM to 3:15 PM, we wanted to find out how #BankNifty usually behaves during this period and how it moves specially on expiry day as well.
Three types of data was gathered
Open to Close
Open to High
Open to Low
That is, what's the actual price movement from 2.45 PM to 3.15 PM.
Then we check what's the maximum up move happened.
Then from Open price at 2:45 PM, we check what's the maximum down move happened.
All these data are gathered and we plotted a normal distribution chart to find where the maximum or frequent movement occurred.
From the data, we could see that Bank Nifty has moved up +2% at the max and gone down maximum -3% from 2.45 PM, that's really a very big move in 30 minutes.But how many times such wild occurrences happened? Very less, less than 3% of the time
Most of the time, the movement was flat, where it stayed between -0.3% to +0.3% and as you can see from the below table, 97% of the time Bank Nifty stayed between -1% to +1%, so whoever bought OTM options beyond this level, they are going to lose 97 out of 100 times.
If you think that, no point in waiting till 3:15 pm, there will be some high move that can occur after 2:45 PM, we should make use of that to book profits and get out, fine. Let's check what's the maximum up move bank nifty makes most number of time.
As you can see, most of the time, the maximum up move was just mere +0.10%, that's very minimal. And 97% of the time, Bank Nifty has never gone beyond +1% after 2.45 PM.
Since at times, Market tanks during the last hour of the day, we shall check the probability of that as well. Let's check what's the maximum down move bank nifty makes most of the time.
As you can see, most of the time, the maximum down move was just mere -0.20%, that's very minimal. And 97% of the time, Bank Nifty has never gone below -1% after 2.45 PM.
Yesterday 26–03–2020 Bank Nifty was trading around 19500 at 2.45 PM, statistically the max up move is +2% which is 19700 and max down move from here is -3% which is 18700
19700 CE Strike was trading around Rs.50 today, if someone had shorted it at that time, then he can be 97% sure that it is going to expire worthless and eventually it went to zero.
Conclusion: #BankNifty stays flat most of the time during the last half an hour of intraday session. 97% of the time, all OTM options expire worthless, so chance of making money by buying such OTM options during the last hour is a sure way to lose money consistently
Better get into #OptionSelling with defined risk during the last 30 mins Intraday time frame, which could help you in making consistent returns over the long run. squareoff.in/single-post/Op…
• • •
Missing some Tweet in this thread? You can try to
force a refresh
One day, my 10-year-old kid asked me, "What do you really do?" He was curious, seeing me either watching Netflix or reading books most of the time, and rarely working on my laptop. "I want to understand what kind of work you do," he said.
I explained to him the basics of investing—how you invest in companies, wait for them to grow, and as they succeed, your shares increase in value, helping you build wealth over time.
Without missing a beat, he asked, "Can I invest in Roblox?" I told him, "Yes, Roblox is listed in the US markets." To make it more fun, I suggested, "Let’s create a demo account on Investopedia. You can pick 10 companies you know, and we’ll invest in them.
SEBI has released a 18 pages consultation paper related to F&O Trading, more than 78 lacs traders lost close to 50k crores in FY24, this is the major reason for SEBI's action, here's the short summary what it means and how it can impact active traders,especially Option Traders🧵
Here's the proposal from SEBI regarding index derivatives.
1. Limiting the no of strikes upto 4% with regular intervals, after increase the width of the strikes interval. Say Nifty is at 25,000, 4% of underlying is 1000, Nifty strikes will be between 24000 to 26000 - 50 interval
At the max Index can have 50 strikes only, in the above example we have close to 40 strikes, so remaining 10 strikes can be added, 5 in put and 5 in call. So below 24000 and above 26000, strike intervals will not be in 50s, it could be in 100s or 200s or 500s.
I went on a ten days family trip to Ladakh, what was suppose to be an adventure trip turned into a nightmare. If you are planning a Ladakh travel, this thread might help you in what you should expect once you land in Leh. 🧵
Many people have Ladakh trip in their bucket list mainly because of the picturesque landscape, high altitude motorable passes for bike ride. But we always wanted to go there because of low light pollution that lets you do star gazing where even Milky Way is clearly visible with naked eye.
Before we started our travel, we did a complete research about the places we wanted to cover. Nubra Valley, Pangong Lake, Tsomoriri lake, Lamayuru, Hanle. It’s hard to cover all these places in short span of time, you need minimum ten days to explore the landscapes of these places.
1 Lac invested in this stock has become 1.5 Crores in less than one year. Upon further research found a pattern in all such stocks which made a phenomenal move within short span of time, here's the detailed report 🧵
SABTNL is one such stock where stock price gained more than 20500% in less than a year. Inspite of having poor fundamentals the stock price has sky rocketed.
Fishy part is promoters have increased their stake from 22% to 60% in just one quarter. Public holdings and DII holdings decreased during the same period. Looks like an organised pump and dump play going on.
I have made close to 90 lacs profits in the last 267 trading days with my trading system. In the last 6 months made 50% net returns. Not even a single day I have interfered manually. I was in a dilemma, should I withdraw profits or continue to compound? I decided to …🧵
I decided to withdraw profits to buy a flat. If you check all my old tweets, I would have tweeted always against buying a property. What changed my mind to buy a flat instead of compounding my capital. Let me explain that.
Trading is a tough profession, market doesn’t care how intelligent you sound, end of the day if you are not disciplined enough to follow your trading system, it kicks you out. It’s not a question of does option buying works or option selling works or Greeks works?
Did a 10 days solo trip to Kashmir, spent just ₹800 a day by staying at Hostel, met wonderful people around the world and this was most life changing experience of my life. Kahsmir is truly a heaven on earth. Here’s how I planned my trip🧵
The moment you arrive at Srinagar none of your other State prepaid mobile network work here. I bought a Jio Sim for 500₹ which is sufficient enough for next ten days to cover my work and to stay connected. If you have postpaid, then no problem.
Ola/Uber doesn’t have a big traction here, Jugnoo is the widely used app here. You can use that to book cab to your hotel or opt for prepaid taxi. I did not have any plans or itinerary, once I arrived at Srinagar, I booked my stay @ZostelHostel for 2 days only.