Musings

Finally after 10 months of fight between me and santosh - we resolved the issue yesterday (25th July 2020) and settle for 3.5 lakhs against 5 lakhs payable to me. in return i had to return the share certificate  Learning from the overall dealing  1. Cash is not the only qualification or competitive  advantage in a business and stay relevant. Because business man who are in need of cash will get attracted to you at that point of  time for partnership when there is need of cash and later when the need erodes partnership is being questioned or trust breaks. In these situation where only cash is provided for partnership - strong agreement to be in place favouring the cash provider as the cash provider does not directly get involved in the business nor know the details to safeguard his interest. 2. Never trust a story which is too good to be true. Rather lose the opportunity than regreting later - Nvron came with a proposition that was too good to be true. Know your strengths and validate w

Like in all initiatives- be it business, exercise, job, hobbies or any passion- Consistency is what differentiates winners from "wanna-be" winners. Theoretically all of us have potential to learn and implement the learning, but practically only few achieve what they want to achieve.  With the advancements in information technologies like Youtube, udemy - learning is democratized- whoever has time and inclination can learn at their own comfort and at their own speed.  So when anyone can learn- why not all who learns cannot implement and win. Partly because they do not have required resources be it time or money or support  and if they have all the resources, then it is because of lack of discipline to implement.  However, most of the impediments of implementation is used as filtration criteria even before learning. For e.g: If i do not have agricultural land or have no intention to buy one in future - there is no use of learning about agriculture and you will not learn. Then i

What should be used as Margin for options Writing - Cash / Bharat Bond / Stock We need to keep atleast 10% of margin as buffer for doing any adjustments trading  Also, we need to follow strategies that are complementing each other  If one strategy is range bound and other strategy should gain when market does not depend on market being rangebound - so when requirement for adjustments comes- we need not do adjustments for all trades If one strategy is long - other strategy should be short and likewise  Trade setup should be bi directional- so that only one side is adjusted any point of time    1. Cash - least effective Margin because we dont earn interest on this amount 2. ETF / Bharat Bond - Comparatively better instrument hold than cash and can be pledged for margin within minimal haircut (8 to 15%)- relevant to put in money during uncertain times or at the times when market is likely to fall - Return on the underying bond is 6% appreciation per year  3. Stock - Invest in the stable s

Inorder to make money by selling options in consistent manner  1. We need have high safety factor & sufficient cushion (sell low premium option strikes)   2. Decent return - sell high number of lots - hence need high margin  Hence to make the money we want - we need to ensure there is high margin money in disposal. hence margin management is very essential and one need to know the trick to pick trades that requires less margin - hence more lots can be purchased 1. Always take trade on both sides to reduce margin- selling 1 call and 1 put nifty is 1.1 lakhs while selling 1 call or 1 put alone will need 0.85 lakhs which means if we take on both sides it will lead to risk mitigation as 1 side will always be profitable for us and also reduction in margin 2. Margin reduces as we go farther in OTM- hence try to take as far strike price possible to reduce the margin  3. Farther the expiry - lesser the premium - options of same strike between the expires -  Closer expiry as low margin as t