Come into the Trader's Den

[SwingKing]

I am loosing interest on idle funds. If I earn 12% on 50% of funds which actually deployed comes to 6% on total funds. Thatz because 50% of funds are idle not generating any return.

To be frank, 6% return is not worth our try in stocks.

When you are in stock markets, you need to think rationally and not like a non investor. You are in a profession, where no gains on capital is also a gain. Non erosion of capital in itself is an achievement. Do you know how many fund managers lose money and how many seriously under perform? If you begin to dig deep in this, you will be shocked to know the stats.

Don't calculate returns the way you are calculating. Keeping money in your account is actually saving money since you don't find the market environment appropriate to invest. Hence, be realistic and realize that you are in a profession where bulk of the gains sometimes comes in one year. This is why stock market returns follow Log Normal distributions and not perfect Normal distributions. A solution to your problem would be to invest the 50% funds in 1 month fixed deposits. This is not hard to do as these days flexibility in FD investments is available. Returns wont be much, but at least psychologically you will be fine.

P.S. - If you don't mind, I would like to tell you one more thing. Don't take it the other way.

If you have 50% money in your account at the moment, then this means you are lacking some planning in your investments. A complete trader is one who is ready with every situation the market bestows upon him. His plan covers all aspects and certainly one aspect is to see that money is never idle.

Tc

 

[alroyraj]

I would like to know is,if intraday a futures contract goes into the Ban list due to market wide position list being reached, is there any chance we can enter it say if we know it has below the limit?
Can we know the live MWPL?
Another doubt is that are both equity and futures entry banned?

Its only the fno trades that add to your position/fresh positions that are banned.

http://www.nseindia.com/content/nsccl/nsccl_foposlimits.htm

Yes but banned till how long. Sometimes it says 75% then 95% ,later 85%. So what is the cutoff ?

 

[Placebo]

You are in a profession, where no gains on capital is also a gain. Non erosion of capital in itself is an achievement.

Do you know how many fund managers lose money and how many seriously under perform? If you begin to dig deep in this, you will be shocked to know the stats.

Hence, be realistic and realize that you are in a profession where bulk of the gains sometimes comes in one year.

No doubt about most of what has been stated above but this kind of mental markup is quite detrimental. Holding on to capital and not trading/investing is probably the biggest psychological barrier one has to overcome. This is the only thing which distinguishes a trader/investor to a risk averse person who wants safety. Get used to handling risk and just go for it without hesitation.

Most people sit on the sidelines not because of lack of opportunity but rather due to lack of conviction. There is always an opportunity to mint money , one has to just take a closer look at things.

And why care so much about some fund manager somewhere and his/her goals or performance. Most of the stats that are freely available are usually no good.

Hope This Helps

Cheers

P.S Please don't take offense to any of the above. The tone might be a bit on the harsh side but the intent is good

 

[SwingKing]

No doubt about most of what has been stated above but this kind of mental markup is quite detrimental.
Cheers

This kind of Mental make up is what separates the best from the rest. But I agree to what you have said as it applies to the majority. And re the Fund managers report, I was referring to research reports which by the way are a lot costlier and full of accurate information.

In the end it depends on how an Individual thinks. Everyone can think differently and still be profitable.

Tc

 

[Placebo]

This kind of Mental make up is what separates the best from the rest.

LOL! If sitting one the sidelines and not trading makes one the best then the world is filled with millions of "best" traders.

Losing money is acceptable mate as it can be made in hardly any time but the constant fear of losing is a pain.

Our views are from two extreme end's and will probably never match and this discussion could go on and on. Never mind that.

Cheers

 

[SwingKing]

LOL! If sitting one the sidelines and not trading makes one the best then the world is filled with millions of "best" traders.

Losing money is acceptable mate as it can be made in hardly any time but the constant fear of losing is a pain.

Our views are from two extreme end's and will probably never match and this discussion could go on and on. Never mind that.

Cheers

You are right as you cannot understand the underlying context. That's due to different beliefs.

Anyway lets leave it.

Tc

 

[DanPickUp]

I am loosing interest on idle funds. If I earn 12% on 50% of funds which actually deployed comes to 6% on total funds. Thatz because 50% of funds are idle not generating any return.

To be frank, 6% return is not worth our try in stocks.

Hi veluri

Some points are mentioned from raunak and an other point is the amount of money, which you invest.

Small money wants to make big money quickly and big money wants to make small money on a constant way.

6 - 7 % pro year constantly, doubles your money in around ten years.

If you have 1 Mil USD or more, you may are happy with this kind of % and if you have 20 Mil USD or even more, what rich people have, you can count by your self, what kind of money the 6 % are.

So, it also depends very much on how much money some body has.

Take care

DanPickUp

 

[Capricorn]

I would like to know is,if intraday a futures contract goes into the Ban list due to market wide position list being reached, is there any chance we can enter it say if we know it has below the limit?
Can we know the live MWPL?
Another doubt is that are both equity and futures entry banned?



Yes but banned till how long. Sometimes it says 75% then 95% ,later 85%. So what is the cutoff ?

Market Wide Position Limits (for Derivative Contracts on Underlying Stocks)

At the end of each day the Exchange disseminates the aggregate open interest across all Exchanges in the futures and options on individual scrips along with the market wide position limit for that scrip and tests whether the aggregate open interest for any scrip exceeds 95% of the market wide position limit for that scrip. If yes, the Exchange takes note of open positions of all client/ TMs as at the end of that day in that scrip, and from next day onwards the client/ TMs should trade only to decrease their positions through offsetting positions till the normal trading in the scrip is resumed.

The normal trading in the scrip is resumed only after the aggregate open interest across Exchanges comes downr to 80% or below of the maket wide position limit.

That's what the exchange says, so we take it as gospel.

 

[nac]

I got a doubt in option pricing.

I was thinking that market price of an option will always be higher than the theoretical price. I wasn't checking every now and then. But I have checked few times, market price of an option was higher than theoretical price.

But now, CE of nifty trading lesser than theoretical price. I thought that option will be trading at least 10 point higher than theoretical price.

Is it all based on demand and supply or its because of long weekend? or its because I took position? :annoyed:

When I took position it was trading more than 10 points now its trading @ -5 points.

My guess/thought about option pricing was wrong or it happened for some other reasons???

 

[alroyraj]

I got a doubt in option pricing.

I was thinking that market price of an option will always be higher than the theoretical price. I wasn't checking every now and then. But I have checked few times, market price of an option was higher than theoretical price.

But now, CE of nifty trading lesser than theoretical price. I thought that option will be trading at least 10 point higher than theoretical price.

Is it all based on demand and supply or its because of long weekend? or its because I took position? :annoyed:

When I took position it was trading more than 10 points now its trading @ -5 points.

My guess/thought about option pricing was wrong or it happened for some other reasons???

I think since an option is an instrument in itself it can go either ways. It like the futures premium over the spot price -it varies widely. Derivatives are largely demand supply driven.
If you are talking about the black Scholes model i think the factor that can varies is the cost of carry.
Please clarify the theoretical price model you are referring to.
Just my view. Dan most certainly has to confirm.