Have random movements increased in Bank Nifty off late? Why have some popular option strategies underperformed in 2023?

Price Density and VIX analysis have the answer. Let's take a look .. 🧵 (1/n) Everday market forms a range (high-low). How the market moves within this range determines what kind of strategies make money. A low noise environment is best suited for trend following while mean reversion strategies can benefit from noise. (2/n)

How has Nifty performed over the past 20 years?

Is investment in index/ mutual funds an easy way to grow your money?

Here's a detailed analysis of the index performance and how drawdowns affect your investments. 🧵 Nifty has given a CAGR of around 13%. That is a reasonable return to expect from the index over the long run. A large chunk of mutual funds and PMS underperform the benchmark, so you know what to expect there.

Large returns (>20%) are concentrated in a few years (2014, 17, 21).

Limit Price Protection (LPP) range shall be the range on both sides of the Reference Price (RP) to validate price of limit orders. LPP is applicable to both limit and SL-L orders in index options.

Here's how RP and LPP will be computed 👇 RP during market hours shall be computed as follows:
1. For contracts that have traded in the last 30 seconds:
> simple average of trade prices of the contract in the last 30 seconds
> this reference price shall be revised throughout the day at 30 seconds interval (2/n)

What are CASH SECURED PUTS?

I suppose lot of people want to know more about Cash Secured Puts (CSP). Simply put, there are 3 scenarios for trading a put:

1. Hedging - put long
2. Speculation - put long/short
3. Investment - put short

Point no. 3 is what CSP is all about. (1/n) The most obvious way to invest in the market is to simply buy a share. However, another way (and a great one) is to short puts. You decide upon a strike (level) at which you're willing to buy the stock and short the put there. (2/n)

People often ask "how do I setup a workout routine?", "what exercises should I begin with" etc

I always say - Can you take out just 5 mins a day to workout?

The answer: YES.. but what will 5 mins do? I can take out 30 mins, no problem

.. And that precisely is the problem (1/4) That 30 mins continues for a day .. 2 .. a week .. and then starts going down .. 20 mins .. 10 mins .. off day .. 15 mins .. off day .. Then bye bye .. (2/4)

While building and trading systems, here are some things I've found helpful:

1. Keep it as simple as possible. You do not need fancy indicators/ charts to make money. Simple works the best. (1/4) 2. There will always be trades which would've worked better had you used some other indicator/method - but that's okay. Don't let it become a reason to tweak your system too often. (2/4)