Discussion with Option Pundit

I had a surprising and interesting conversation with the founder of OPTION PUNDIT. It was pleasnt conversing with him and sharing various ideas about Indian market peculiarities in terms of options market.

His unique take on Indian Market.

What we can learn from FUTURES & OPTIONS Program

FOME  workshop  scheduled on JAN 8 - 9 , 2011 has the following objectives

1. Learning about Option Pricing Models ( BSOPM)
2. Compare the risk profiles of Option Trades
3. Estimate the probability statements made by a volatility figure
4. Discuss how changes in different variables will affect the Value of calls & puts
5. Principles of volatility trading and how this type of trading can be profitable
6. Identify ways to make money trading with a long and a short Gamma position
7. Caluculate the Historical Volatility and evaluate the resulting Data
8. Describe Skewness and Kurtosis
9. How Skewness & Kurtosis affect the prices of OTM Option
10. Understand the basic Option position payoff profiles
11. Risk Sensitivity mubers - Greeks
12. Trading in the real world - putting it all together to derive our forecast volatility
13. Trade structure that benefit from rising or falling IV
14. Trade Structures that benefit from Time Decay acceleration
15. Trade Structures that benefit from  Rapid price Spikes
16. Price distortions during the final days of an expiration Cycle
17. Predicting and exploiting expiration day strike price pinning
18. Expiration day Volatility Collapse and dynamic position management

Trading Floors at Colleges

For MBA students specialising in Finance and Investments integrating Classroom and Trading Room is important.

1. Where Homework Is Managing a $200,000 Stock Portfolio
2. Many B-Schools are also adopting this idea to show case and bring students to speak industry jargon.
3. Dr Brett on Financial Engineering program
4. I had similar experience at ICFAI School of Financial Studies in running a Trading floor with SPIDER IRIS Software and othe real time facilities.
5. Dr KGR at VJIM had contemplated these facilities long back.

Student Empirical Research in FINANCE

I had chanced upon this article on the experiences in " STUDENT EMPIRICAL RESEARCH "

1. Lot of interesting findings useful for B-Schools / MBA institutes.
2. I think this is a welcome trend in Business education as being implemented in Great Lakes , VJIM , ISB etc.
3. The skills required of Post Graduates as commneted upon by Dr Ajay Shah
4. Interesting discussion on the increasing relevance of FRM

OPTIONS & VOLATILITY Resources

Some of the options & volatility resources that are of interest to traders and students are listed below.

1. Daily Options Report
2. Option Condors
3. DonFishback's update
4. Options for Rookies
5. Options Pundit

NEW & Refined FUTURES & OPTIONS Training JAN 8 - 9 , 2011

Futures & Options Made Easy (FOME 2011) is improved & refined in 2011 with lot of new additions very useful for students, traders and any one interested in the Derivatives Markets.

1. Option analysis software is being provided free .
2. Complete analysis of 22 option strategies of NSE OTS Module.
3. Lot of Examples are added to the course presentation
4. Complete market microstructure and market design is integrated.
5. Special topics on VOLATILITY and Statistical Concepts.
6. Real world trading approach and demonstration of trading and analysis software tools .
7. Sessions on Trading psychology & riskmanagement

INTERESTING READINGS

Some of the posts I found may be of interest to the readers.

1. How to trade with the STOCHASTICS.
2. Newton Linchen has a very interesting Trading & Investment Library
3. From the God of Trading Psychology
4. JR Verma on Financial History books. His Derivatives & Risk Management is a my favorite for Indian perspective. I think everyone interested in Financial History should read william Goetzman.

Can I be 100% sure of Making Money?

In response to my many advertisements in the print media, canvassing for participants in my three trading & Investment education workshops , I often face many intriguing questions.

1. Three core educational workshops were being focussed by me namely 

 a) TECHNICAL ANALYSIS MADE EASY ( TAME),
 b) FUTURES & OPTIONS MADE EASY ( FOME)
 c) FUNDAMENTAL ANALYSIS MADE EASY ( FAME)

    2. Often participants ask"  is there a 100% guranteed way to make money ". I am left speechless for a moment as I have no short answer.

    3. Here I try quote from professional traders in trying to answer the above question.
    4.  “Contrary to popular belief, trading is a craft. Like an artisan who develops a craft over a lifetime, it requires a discipline to be exercised daily.” Mike Bellafiore 

    5.   What’s going to happen? Who knows. As a trader, you’re not supposed to know the absolute future   to be able to profit from it.
You study the chart, assess the structure, define the probabilities, and then if you feel an opportunity presents itself, position into the price action that triggers an entry (or exit in the case of a stop-loss).
                                        
                                   - COREY ROSENBLOOM

6,"There is nothing to 'get' as a trader. What works one month may not the next. Trading set ups you crush one year may be extinct the next. As prop traders our job is to recognize present patterns and exploit them. But we also must have the humility to accept that these patterns might change at any moment. And when they do we must find new patterns. We must adapt."

                              - Mike Bellafoire

I can quote from any number of respected industry voices, but the beginning or developing trader needs to realize and internalize that" there is no holy grail in trading to be discovered"

Stocks in Play

Stocks that may be on traders' radar today

1. FINANCE TECH : The stock appears to have rebounded stronly yesterday. My inductive leap  of understanding in this might have to do with  SEBI Chairman replacement / hopes of MCX-SX revival ?

Understanding TREND !

One of the major dilemmas faced by the traders is regarding Trend. Here let us try to understand it by standing on the shoulders of Giants in the field of financial Markets.

1. Interesting readings on Momentum. The large amount of research freely available on the web provides a solid foundation for the motivated market participant.
2. How to draw a Trend Line. Many of the details in TA is important  and nuances in TA should be considered.
3. Jim Sogi on Trends
4. Phil a DailySpec author on Trends
5. Trend following by Rocky Humbert
6. Trend spotting from Kensmith
7. The classic by chairman of DailySpec and the chief speculator on Negative feedback
8. Range and Trend by Bill Rafter

Everyone can Learn & Use Technical Analysis

TA remained a secret to me for many years due to lack of access to proper resources and orientation. Now one of my aims in this blog is to share and open the TA approach to as many market participants as possible.

1. As a DailySpec member , I have my own reservations about naive TA and stubborn adherence to rigid rules.
2. But if approached in the way of concepts, TA can be a powerful tool in the arsenal of a disciplined trader.
3. Another advantage in understanding TA is to be aware of the Media Jargon in interpreting market movement.
4. If one has basic concepts of TA, I found following many analysts in the media like Ashwani Gujral, Sudershan Sukhani, Rajat Bose, Devangshu Datta,Atul Suri  enriches our foundation and really adds to building our edge in the market.
5. I believe the first step in becoming an independent analyst , is to understand what other commentators are saying and can we reconstruct their arguments independently ?
6. What I implent in my Futures & Options training program is to decode many of Devangshu Datta's Derivatives articles in Business Standard .

Essential Package for MBA ( Finance) students & Fresh Graduates

BlackSwan Financial Marlets School is launching an essential package for MBA Students of JNTU/OU.
This package is planned as three parts which will give solid understanding of Equity markets, Practical exposure to Trading & Exchanges, Corporate perspective on relationship management in Financial services industry.

1. One-Week Crash Course ( Dec27- 31,2010) full time ( 10am - 4 pm) on the subjects  SECURITY ANALYSIS & PORTFOLIO MANAGEMENT , DERIVATIVES.
2. NCFM - Capital Market Dealers Module & Derivatives Market Dealers Module Training
3. Live project with Share Broker ( Member of NSE)

Feedback from a Participant

I am happy to post a pleasant feedback from a participant in Futures & Options Training program.



                "Hi Mr Dhananjay,




I am Alnoor Parbatani , i ve attended ur workshop on future and option strategies last week , which gave me good insights on market and its behaviour .


Now i am comfortable in understanding of option strategy and after reading and understanding of material u given to me , i tried my first hands on attempting the ncfm option paper mock test werein i was able to score 75% in my first attempt out of 90% . i thank u for ur valuable traing and input .


reagrds


Alnoor "


9533252765

Technical Analysis training Program

As I am preparing for the 2-Day workshop on  DEC 18- 19, it gives me an opportunity to look afresh at my TA Concepts, tools, actionable strategies.

1. Understanding Trend is the most basic. Often beginners questions revolve round Trend determination.One good post on this by Tucker report.
2. What Indicators trader should use and the steps to follow in looking at a price chart ? 20EMA,50 EMA, 200 SMA and Bollinger Band ( 20,2,0) together with MACD (3,10,0) is the preferred approach of Corey Rosenbloom.
3. Reasoning in terms of Key levels to watch, idenfying any confluence in all these price levels, developing an IF / THEN logic will build a solid foundation for the trader.
4. Using multiple timeframes in our analysis. Studying daily chart, weekly chart in conjunction or reading both 15-min and 30-min Intraday chart.
5. Having tools to detect TREND CHANGE
6. Trying to answer the frequent question of best time frame to Trade
7. Interesting post on the relevance of Trading Education.
8. I will be emphasising on the various free tools available to the Indian retail trader in his quest for trading success.
9. This 2-Day ful time program will help investors and traders take independent decisions, make sense of the randomness of markets, decode the jargon of financial media anr recommendations/ tips from brokers and consultants. 

Reflections on F&O Training Program

We have succesfully completed F&O Training program during Nov 28 - 29. Some of my learnings from this workshop

1. The group of 14 participants are very involved. Experienced traders from brokerages, Technical analyst also attended.
2. Innovations in the program included walking through many Derivatives articles by Devangshu Datta in Business Standard, Using Options caluculator in NOW Software.
3. As a team we are able to crack the Option Greeks.
4. Our course pack is compiled from NCFM modules on Derivatives Market dealers module, Option Trading strategies Module, Derivatives & Riskmanagement by J R Verma and Options Trading by Jeff Augen.
5. Need for actionable techniques and immediately useful trading ideas were stressed by some of the participants.