I keep sending investment ideas, not tips, to my customers who have done my course.

Here is what they get as my paid members which is not sent to free newsletter subscribers.

On Jan 18, 2021 at 1:28 PM, I sent a mail to my mailing list that has email of people who have done my Nifty or BN course.

Here is the screenshot of the email sent date as proof (a copy of the email goes to me as well):

Here is the screenshot of the email sent:

Copy of the email in text (only after the stock already rallied):
=======================
Hi,

This email is sent to paid customers only. It will not be published in my site or anywhere else.

Bajaj Finance Ltd. currently trading at 4,743.95 (18-Jan-21), is a good stock to buy. You can invest some and keep some money for another 4-5% fall and then exit at 10% profit at wherever levels is your average.

If you do not want to invest more you can exit at 5200.

Please note that I may or may not give an exit call. Do not take a stop loss. Bajaj Finance Ltd. is a fundamentally strong stock. Hope you understand why people like us make money from stock markets.

For example, ZEEMEDIA a Group (B) stock is also a good investment currently – but I advise not to even buy one stock as its Group (B) stock.

Just invest with kings and you will always be happy and a proud investor.

=======================
Today is 21-Jan-21 (3 days after the email was sent). See where is Bajaj Finance Ltd. It’s almost 10% up from 4743 levels:

Like this people who have not done my course are not in my paid email list so they miss investment opportunity for life plus a lot of extra advice that I sent to them on stock markets, which is never sent to them.

For this, I do not charge anything.

So apart from learning the strategies, you will also get ideas on investment.

If you want to do the Nifty and Bank Nifty course you can pay the fees.

Click here to see the fees and pay online for my course.

After payment I will send you the strategies.

You can ask me questions on the strategies on WhatsApp or email or phone.

Once payment is done I will manually add your email in my paid list for life.

Then you will start getting my paid emails as well.

I kept telling via my emails, that Nifty is due for a fall. If you have not subscribed to receive my emails please register here:
https://www.theoptioncourse.com/beginners-get-option-beginners-course-free/

Recently it fell from 14600 levels to now 14300.

NSE on 18-Jan-21

Source: https://money.rediff.com/index.html

What will happen next?

Two major events are coming:

1. 20-Jan-21 – Biden taking over as President of USA. (I think if he takes the oath and become President of USA he will be the oldest man to become the President of USA.

2. Covaxin (The Bharat Biotech vaccine is a vaccine that aims to protect against COVID-19) vaccination results will be out by end of Feb 2021.

If Biden takes decisions that may affect Indian businesses in a negative way, markets may fall further. If its positive markets will rise.

Right now we do not know the results of either 1 or 2. That’s the reason why India VIX is falling:
https://www.moneycontrol.com/indian-indices/india-vix-36.html

At the time of writing this email, it was 24.79. Quite high for trading derivatives. Please note it changes during trading hours and will be different when you see it.

Please note that India VIX does not have much impact on equity investments except during election times or major economical events. So those who do not trade derivatives like options and futures, need not worry.

But high India VIX is a worry for you if you trade derivatives. High India VIX means huge moves will happen, like it has happened today and happening intraday.

So please trade carefully.

P.S: If you want to trade peacefully without stress and without bothering about markets ups and downs, you can do my Nifty monthly income and Bank Nifty weekly income course. You will learn properly hedged strategies to make approx 36% a year. Minimum required to trade is 45000 (as in Jan 2021).

You can pay the enrollment fees in the course page here.

Option theta is very important indicator for traders whether you want to buy or sell options. It helps to predict how over time the price of the option will change.

Theta is time value of options, means options expire on a certain date so their life is limited. Time value is built in the premium of the option, of course it ends when the option expires on the expiry date. If you want to read Option Greeks in details you can read here.

Time decay accelerates as an option nears its expiration date. It is the fasted on the last day of its life. Option cannot be traded once the market closes on its expiry date. All the traded contracts are settled for profit and losses on this date.

See this image to understand the graph of time premium expiration w.r.t time. Time decay is fastest near the expiry day. This is one reason why traders sell options near its expiry.

The rate of return on investment will be faster if it expires fast. Therefore many traders prefer to sell weekly options rather than monthly options. I have a course on weekly options that will teach how to sell weekly options near expiry with hedge so that the risk is highly reduced in a black swan event.

Should you sell index or stock options?

Stocks are very volatile in nature. Selling options near the expiry may get very risky as the premium you get will not be sufficient to overcome the trading costs. Therefore if you want to sell stock options they should be expiring in more than 15 days else you will not get enough premiums to take the risk of selling options.

In my Conservative Option Course there is a stock option selling strategy that gives minimum 15000 per month without taking too much risk.

In the US leap options are very popular. Leap options are options expiring very far of months like 6 months. However in India there is hardly any volume in stock options in the next month. Even if you are able to sell next month’s option you will find it difficult to get a buyer when you want to book profits. Therefore you can sell stock options for the current month with hedge.

Here is a list of things you can prepare before the year ends so that you trade stocks well in the year 2021.

1. Check you past trades of 2020. See what mistakes you did. Write them down and try not to repeat those mistakes.

2. In the trades that you were right and book profit – write what happened that you made profits and what you could have done to get better results. You can do these corrections in the trade taken in the year 2021.

3. If there was more than 10,000 loss in a single trade – write down why you did not take a stop loss. Even if your reasoning is correct, it is 100% WRONG not to take a stop loss at minimum 2 and maximum 5% of the margin blocked in a trade.

4. If you took a profit of more than 10,000 in a single trade write the reason. If it was a fluke then you learned nothing from the trade. But if the reasoning is logical, follow such trades in 2021.

5. Most Important: Write down the total ROI in the year 2020. If it’s negative, you have to tell/promise to yourself that this will not be repeated in 2021. If it’s positive, promise to yourself that you will repeat this performance in the year 2021.

6. If you lost more than 5 lakhs in the year 2020 while trading or till today, you are not serious about your money and you do not want to learn. If you do not want to pay and learn, then follow one good strategy, paper trade for 6 months, become master of that strategy and keep trading for your life.

Tip for traders: Whether you are intraday or positional trader remember this advice – keep your profit targets double that of stop loss. Means if you took 10 points profit in a trade, then the next trade you take, should have a stop loss of 5 points or less. In this way, even if you are right 50% of the times you will end up making good money.

Tip for investors: Allocate 5% of your salary for investing in stocks. Do not invest in ay stock because you think so, or your friends think so or someone in some website/tip provider/broker said so. Do proper research before investing in a stock. You can also open a Demat account in Zerodha mapped to me to learn how to choose stocks for investing for the long term, as well as the short term.

Click here to open an account in ZERODHA mapped to me.

If you already have an account in ZERODHA you can open an account in UPSTOX mapped to me.

Click here to open an account in UPSTOX mapped to me.

Zerodha & Upstox are both discount brokers and DO NOT charge any fees for stock buying and selling.

Once the account is opened you can contact me and let me know I will teach you the strategy personally on WhatsApp.

Nifty intraday movement has become very volatile now. For intraday traders, this is a problem.

Check this intraday movement of NSE on Friday, 18-Dec-20. Intraday movement is more than 100 points:

Source: https://money.rediff.com/index.html

What you can do if you are an intraday trader?

Keep your profit target more than stop-loss every day. For example, if your profit target is 50 points a day then your stop loss should be 25 points.

Personally, I do not like intraday trading. I was caught doing it while in a job in 2007 and was sacked.

If you have a job you just cannot do intraday trading and also do your job. The fear of getting caught. The fear of losing and of course loss of focus.

Read the above sentence again. Do you think with so many problems one can actually trade intraday and make some money that too consistent and also at least 20,000 a month?

With positional trading it is possible. To make approx 20,000 a month you need a capital of 5 lakhs.

This comes to about 4% a month.

If you trade with 5 lakhs do you make 20k a month?

If not you can do my nifty and bank nifty course and start doing it without stress from next onward.

Some people ask me which course they should do first. Nifty or Bank Nifty?

The answer is – its better to do both as you will save some money.

If you do nifty course first, there is a high chance that you will do bank nifty also later. So you end up paying more. It’s better that you pay less and learn both. Become a good trader in both nifty and bank nifty options trading. The nifty course will teach you how to trade options for monthly income, and bank nifty course will teach you how to make money trading the weekly options.

So both the courses are important.

Click Here to check the course fee and enroll in both the courses.

Do not forget that you will just not get well documented and explained PDF files, you also get my support for one year to understand the strategies. Plus you become my paid subscriber and get paid emails for life that does not go to the free newsletter subscribers.

This email can be investment advice, a trade etc.

This post was written & posted on Monday, 30-Nov-20, therefore you may read some words as Today/Tomorrow etc. Please keep this date in mind while reading.

Some help was taken from these sources to write the article:
1) ZERODHA – India’s No. 1 discount broker, &
2) UPSTOX – India’s No. 2 discount broker.

If you click on the above link and open an account mapped to me I will teach you a good equity investment strategy where you will learn how to choose stocks for short term investment and how to choose stocks for long term investment. You will feel good choosing and investing yourself rather than depending on advisory services.

From tomorrow (01-Dec-20), the margin for Intraday trade will increase. Please note that exact margin may differ up to 10% from broker to broker – but in short, by Sep 2021, the margin will increase by three times for all intraday trades. Please read for more details.

Clearing Corporations (CC – https://www.nscclindia.com/ ) – will now take 4 snapshots of client positions at random times during the day and see if there was sufficient margin available with the broker at that time. If not, brokers will charge a penalty to the client at the end of the trading day.

A word on Clearing Corporation – NSE CLEARING, Website: https://www.nscclindia.com:

NSE Clearing Limited (NSE Clearing) (formerly known as National Securities Clearing Corporation Limited, NSCCL), a wholly-owned subsidiary of NSE is responsible for clearing and settlement of all trades executed on NSE and deposit and collateral management and risk management functions. NSE CLEARING was the first clearing corporation to be established in India and they introduced settlement guarantee before it became a regulatory requirement.

In other words, nscclindia.com will now have access to your trading account and will know what trades you are taking.

In this post, I will try to explain the margin changes coming into effect from Tuesday, 01-Dec-20.

Who will not be affected?

Options buyers will not be affected. The risk to buy options is blocked fully right from the day options trading started. It cannot increase from here, neither it will decrease in future.

But option buyers rarely make money.

Who will be affected?

Everyone other than option buyers. Intraday option sellers, intraday future buyers, intraday future sellers, intraday equity buyers and sellers. This will happen across the board, means the commodity traders will also be affected.

Here is some more bad news.

This margin increase is not final. They will keep increasing the margin with time. By Sept 2021 Intraday margin will match that of positional margin blocked. Please note that because there is just one day gap (not even 24 hours) for brokers to make changes to their software, there may be such that a client trade will go through without following the rules of the new margins. If that happens the brokers will charge a penalty to the client at the end of the trading day.

Here is how with time margin will increase and penalty that a client will face:

Dec 2020 to Feb 2021 — penalty, if margin blocked, is less than 25% of the minimum 20% of trade value (VAR+ELM) for stocks or SPAN+Exposure for F&O. The minimum margin the broker has to collect while entering a position is 25% of the prescribed limit.

March 2021 to May 2021 — penalty if margin blocked less than 50% of the minimum margin required. The minimum margin the broker has to collect while entering a position is 50% of the prescribed limit.

June 2021 to Aug 2021 — penalty if margin blocked less than 75% of the minimum margin required. The minimum margin the broker has to collect while entering a position is 75% of the prescribed limit.

From Sept 2021 onwards (final change) — penalty if margin blocked less than 100% of the minimum margin required. The minimum margin the broker has to collect while entering a position is 100% of the prescribed limit.

Advice: Try to take just one intraday trade from 01-Dec-20. Since the calculation is not easy it is better to avoid a penalty. With time I am sure software will be upgraded.

One more change – only 80% credit from selling holdings can be used on the same day for intraday. Till today (30-Nov-20) clients were allowed to use 100% of the credit from selling the holdings.

Here is an example:

If you had 100 shares of Infosys and sold them at a profit. Then imagine that, after you sold, price of Infosys dropped by 5% the same day. You want to book that 5% profit. Now, till today (30-Nov-20), you were able to buy back 100% of the shares – means you can buy back all 100 shares sold few minutes/hours ago, but from tomorrow (01-Dec-20), you can only buy back 80 shares as 20% money of the sold holdings will be blocked and released only after the trading day is over.

Frankly, I do not understand why they have done this. I sold my shares, so I should be allowed to buy it back. Not sure of the reason why SEBI has done this. There are absolutely ZERO risks for both the client and brokers in selling a holding and buying it back intraday. This can easily be treated as a Margin Intraday Square-up (MIS) trade. If you understand the risk please do let me know in the comments section.

Of course, had they blocked this for other intraday trades I can understand, but buying the same shares back the same day has no risk at all. Of course, you can buy back all of them if you have money in your Demat account for those 20% shares.

Here is another important change that you should keep in mind: Always first exit the high risk (margin) leg of a portfolio of your F&O positions.

Example:

Suppose you bought a Call Option (CE) at strike 10 and sold a Call Option (CE) at a strike 9. Now the sold option at strike 9 is completely hedged by the bought option at strike 10. The margin for this trade will be Rs. 30,000/- approx. in Nifty (as on Nov 20). Now suppose Nifty is rising extremely fast, and the sold option at strike 9 is losing money and is at huge risk. You want to liquidate the position due to losing money fast.

Earlier a trader could have exited the position by getting out of any one position first, and then the remaining position later. Now if you exit the bought Call Option at strike 10 first and then the sold Call Option, there can be a penalty. Why? Because once you exit the bought position – the sold option is a naked trade – completely unhedged – so even for 2 minutes if you keep that and by chance in that 2 minutes Clearing Corporations take a snapshot – you will have to pay a penalty.

Not sure how the real world will work out as there are no details on if the snapshot of the wrong margin used trades will be penalized, or brokers will see and snap a penalty. And for every second how will the brokers keep a tab? This change in brokers software in less than 24 hours is next to impossible. So some traders who do not know about the margin rules or do not read emails sent by brokers may end up paying a penalty for a trade written above or may not if they are not caught. But this will be for a limited time. I think within 15 days all top brokers would have changed their software and I feel they will not allow these kinds of trades to go through.

But who knows, greed is such a bad thing that some brokers may just love to eat money of their clients in the name of penalty where the poor clients will not have the power to fight. Honest brokers will not do this and make sure their clients are not able to trade trades that are supposed to fall under the penalty path.

The true picture will come out from tomorrow onwards.

So remember two things especially if you are an intraday trader from 01-Dec-20 onwards:

2. Exit the sold option or future first then the bought option or future to avoid a penalty. Exit the sold F&O position first even if it’s making a profit to avoid the penalty.

Hope this will help you to save a penalty.

Yesterday I had written that the current rising stock market is news based uptrend.

The question is how good news has to be that it keeps going up? Well, the answer is that there can be no news good enough that the markets will keep going up always.

WHY?

Well lets us go back to how stock markets work.

Very Simple Logic:

If Demand is more than Supply (there are more buyers than sellers), then the stock moves up.

Similarly, if Supply is more than Demand (there are more sellers than buyers), then the stock moves down.

When good news hits the market, traders and investors jump in with cash to buy stocks. This increases demand. Similarly, when a company shows great results you will see the stock in action – it goes up for some time or even days depending on the results.

And exact opposite happens. When bad news hits the market – investors panic and start selling the shares – thus bringing the stock market down.

The question remains – why then going up has a resistance somewhere and coming down also has resistance somewhere a.k.a support?

No, unlike what many traders beleive, candlesticks do not decide resistance and support levels. It is the news and limitation of investing that brings resistance.

Talking about a recent example – both down and up you can see this year 2020:

As you can see from 12000 levels – coronavirus news to less than 8000 in three months – and then lockdown ends – (good news) – so slight rise and then Biden wins – shooting up.

Can you now see a correlation between news and movements of the stock markets?

Just a small note on why more demand takes the stock up. Hope you must have seen Ask and Bid prices when you trade anything on your trading terminal. If you do not know – Bid-Ask Spread is typically the difference between ask (offer/sell) price and bid (purchase/buy) price of a stock. Ask price is the value point at which the seller is ready to sell and bid price is the point at which a buyer is ready to buy. If the demand is high the seller usually tries to keep the sell price of a stock slightly higher than LTP (Last Trading Price). Since investors are desperate to buy the stock, they accept the offer – thus taking the stock price higher.

Similarly when bad news hits the market/stock the investor panics and is willing to sell at whatever price they get. This time the Bid is lower than the Ask – frustrated seller accepts the offer taking the LTP lower.

When trading was done offline you must have seen such images in your news channels – I am talking about late ’80s and 90s:

This is where a broker is signalling a stock sell/buy price to another broker. If they agreed the stock price moved.

But now since its all online the broker’s job is limited to make sure the trading goes through online.

Hope I have made it clear how the stock markets. So if you want to be small-time investors (short term investor) then your best friend is the news, not any charts of a technical indicator – actually, they will become your enemy in the long run.

This is news based uptrend.

News 1: Joseph Robinette Biden Jr won the US election 2020. He is known to be pro-business and less anti-china. This is positive news for stock markets across the world.

News 2: Pfizer, BioNTech say their COVID-19 vaccine is more than 90% effective:
https://indianexpress.com/article/coronavirus/pfizer-says-early-data-signals-covid-19-vaccine-is-effective-7028254/

So two news both positive for the markets.

What amuses me is that so-called experts of stock markets will not admit this – rather they will make a confusing technical chart and fool people that look I had predicted a huge run for the markets because of so and so candlestick etc.

Seling candlesticks make money not looking at them and predicting market movements.

I suggest if you cannot stop yourself from trading then go for Call Debit Spread.

Most importantly, become a conservative trader, try to make 3 to 5% a month on the money used to trade. Anything beyond that is impossible to make. Too much fake profit screenshots are there in social media nowadays. I suggest just get out of these channels. They take one buy future position in one account and one sell future in another and show the screenshot of the winner. It’s that easy 😉

If you look closely they will not show call or put buy position at all as buying a call and a put seldom makes money.

When markets are near all-time high one should try to invest as little as possible. Or you can wait for a few days and then re-invest.

NSE as on 09-Nov-20:

NSE as on 09-Nov-20

Source: https://money.rediff.com/index.html

Why wait for a few days?

Because markets may retrace back / fall by about 2-3% and give you an opportunity to invest again.

When markets are at all-time high it is better to book profits and wait for a reversal back to mean.

Mean is the average of the numbers. It is easy to calculate – add up all the numbers, then divide by how many numbers there are. In other words, it is the sum divided by the count.

What is the best mean for stock markets?

Six months. Yes, I have seen that many times and actually benefitted from that – but it requires a lot of analysis to select stocks and then wait for the correct reversal to invest.

Or, if analysing stocks out of thousands available in the stock markets is difficult for you or you are very busy you can get my long term coupled with short term profit booking (waiting for reversal and re-investing) course for free.

No – this particular course is not for sale. The only way to get it is to open a ZERODHA / UPSTOX account mapped to me.

Here is the link to open a ZERODHA Demat account mapped to me – please click and register immediately to start the process::

CLICK HERE TO OPEN ZERODHA ACCOUNT MAPPED TO ME!

And here is the link to open a UPSTOX Demat account mapped to me – please click and register immediately to start the process::

CLICK HERE TO OPEN UPSTOX ACCOUNT MAPPED TO ME!

Benefits of trading with ZERODHA / UPSTOX:

There is a limit to invest your money in stock markets. Yes, ideally you should save 20-25% of your income and out of that 40% can be invested in stock markets.

Still, I do not advocate investing too much money in stock markets?

Let me give you an example.

Vijay’s take-home salary is 1 lakh a month.

– 25% saving is 25,000
– 40% of 25000 is 10,000
– In a year Vijay can invest 10,000*12 = 1,20,000 in stock markets which in other word is 10% of his take-home salary.

Assuming his salary is same for the next 30 years, or he invested Rs.1,20,000 for the next 30 years in stock markets and makes a return of 25% a year.

His invested money in 30 years = 120000 * 30 = 36,00,000 (36 Lakhs).

This is an investment that most can afford in 30 years, but the investment should not be made in one month or year – it should begin at a young age and by the time one needs money for financial goals like kids higher education in a foreign country or costly private colleges the money should be there.

At the end of 30 years, he would have Rs. 43,79,16,180.51 (Mind-boggling 43 crores+)
Total interest earned in the invested money of just 36 lakhs: Rs. 43,43,16,180.51 (Mind-boggling 43 crores+)

Can you see that almost all money Vijay gets back after 30 years is total money made from the stock markets? Assuming he started at 30, by the time he is 60 he will be richer than his own boss.

Today I got an email that I want to share with you.

Hi Dilip,

I have resumed work now (after coronavirus). Thanks for the promo of your new course. I only want to ask you is that whether potential revenues by way of referral commission from Demat accounts is enough to cover your costs or you have opened up this route recently and are testing the outcome? I will probably open a Demat a/c with Upstox and that I will map to you.

By the way, Nifty has today broken a modified Gann swing low (as per Marc Rivalland method) on 15-minute chart, at today opening. (14-10-2020).

Vivek

My reply was:

Vivek they pay me 30% of the brokerage generated. Yes, it’s less, but even 1 rupee is a rupee earned, right?

This is pure risk diversification (risk management is different). Me being conservative – not just in trading but in life – I cannot put too much money in stock markets even after knowing I am comparatively at par with some experts giving advice in moneycontrol or having Telegram channels of 50k people. This is risk management. I will pay a price if I do not follow. Actually, anyone will pay a price if they break the rules of risk management.

Nifty usually copies US markets, not technical. Tell me one reason – from 7600 to 12k in 4 months – where is economics? In fact, the virus is worst now and economics has not improved in the last 4 months. Nifty started to rise when US markets started to rise.

Thanks,
Dilip

Tip for those who trade directional future positional in Nifty: Read above – Nifty usually copies US markets. Try to copy what happened in US last trading day – with a stop loss half of the profits you want to take. Your success rate will be 70%.

What do you learn from my newsletters?

That be conservative in life – in spending as well as stock markets. The more you become conservative the more money will keep generating in your savings account and then route them in safe deposits like debt funds / FDs / Post Office savings etc. Keep a serious check. I write them down in an excel sheet every month. I assume less than 1% of earners do a simple thing as write down the savings and investments every month. It takes less than 15 minutes to do this check. Get alert if the savings go down by 10% in any month compared to the previous month. Check what mistake you did and never repeat the mistake again ever.

It is always advisable to keep 70% of your savings in guaranteed returns. Today the rate of Fixed Deposit is almost 6%. Yes, it’s less – but it’s not about money-making-money (even that’s good), but its more about saving for a better future and keeping the money safe with ZERO risk.

Here is Upstox link if you want to open an account mapped to me. If you are in 30% tax bracket, I suggest, to save taxes, open an account in your wife’s name. Learn to save money – there are many ways. This is one of them. Why pay 30% of the profits to the government when you can easily save it.

I will not name the broker, but you know that it does not allow selling deep out of the money option due to some reason – whatever – but with Upstox you can sell any option you want even if its 9% away – that’s guaranteed 1% a month. Please click on this link and open the account:

Of course, I will send a long term strategy combined with short term profit booking if you open an account mapped to me as a thank you gesture. It’s good if you don’t find time to trade options or futures and cannot monitor much the stock markets. It’s for investors who want to scale and are willing to wait for profits.

If you already have Upstox acc, you can learn the investing course by paying a small fee of 3500. You can click here and pay, (or pay by Google Pay to 9051143004). I will send you the course to your email for studying. If you have any doubts do ask me. Please note that its lifetime earning. You will lose only if you get stuck in a stock that keeps falling never to rise. But you will be doing this in 10+ stocks. Even if 2 fail – the rest will keep making money – in short term as well as long term. We will do scalping too in the stocks to take out small profits in between. You will learn everything.

Note that for stock investing there is no brokerage in Upstox too – so I make nothing if you just buy stocks. But that’s not important – what’s important is that you play safe and keep making over 20% return a year from stock markets. Start small then scale.

BTW, Ratan Tata has invested in Upstox. I am sure he must have done his research before putting his money there. He is a venture capitalist in Upstox – so he gets a share of profits every quarter.

Please take this email very seriously and become a conservative trader. I have many customers who want to trade with over 1 crore. I just fail to understand what’s the need? Have you ever asked yourself what will you do with that money? 1 crore needs to be saved first not to be traded.

If you can give good education to your kids and have more than 50 lakhs when you retire – that’s enough to live a peaceful retired life in India (as of 2020) unless of course, you plan to buy a Lamborghini when you retire. 😉

If you really have 1 crore spare, then keep at least 70% of it in safe deposits in 2-3 good rated debt fund. They make 1% more than FDs in the bank. Rest 30 lakh you can trade.

Hope you listen to me. If you have any question do ask.