Read to know how you can trade the budget month of February and March 2016. Vega (VIX) will increase so buying options may be profitable.

The Budget session of Parliament will commence from February 23, 2016 and the government will present the General Budget on February 29, 2016.

Expiry day is on February 25, 2016.

Many a times, stock market makers will postpone the February expiry date to the budget day to help traders make the most of the budget day. Unfortunately it only helps traders trade more and lose more. Not sure if they are going to do that again this year and I hope they don’t, but for now 25th is the expiry date. If they extend the expiry day, I will inform you.

So even though the expiry happens in February, there will be interesting things happening in March Expiry as well.

So, How to Trade The General Budget February and March Expiry 2016

INDIA VIX:

It is is around 25 now, and I am quite sure until the budget is over this is NOT going to fall very much. May be it will be in a range from 22-25. But as the budget day approaches it may well be near 30.

People who buy options, February is the only month that favors you. VIX doesn’t fall. Huge volatility in markets. What more do you want?

Long Straddles / Long Strangles Will Work

This is the time to go long option buyers. 🙂

Note for traders who have done my course. With 10-20% of your trading capital, you can try going long with options.

You can trade Long Straddles or Long Strangles.

If you do not know what is a long straddle, then its buying of both Call and Puts Options of the same strike (usually traders buy ATM (At The Money) options), same quantity (no. of lots) and same expiry and waiting for a big movement. In the Long Strangle the trader can buy any strike call and any strike put option (usually out of the money (OTM) options are bought). In Long Strangle too number of lots bought remains same and the expiry also remains same.

Please note that payoff will differ in both the strategies. Long Straddle will almost always outperform the profits from the Long Strangle. The reason being the trader is taking more risk by paying more premium, why shouldn’t they make more for the same move? There is a technical reason as well, and that is the movement will take at least one of the options In The Money (ITM). Since the other side’s premium will not melt fast due to increasing VIX, it minimizes the effect of theta (time) on options, thus overall profits can be huge.

Warning: Movement has to come to make a profit in long straddles and strangle. But risk is low this month as premiums will not see a sudden drop. And we all know movement will come in the budget month.

Since VIX will not fall, its quite easy to assume that the options premium will not evaporate fast. And if the options premium will not evaporate fast, a movement of even 1% can bring great results. Please remember to square your positions Intraday (within the same day) or within a max of 3 days, no more. One day or the other theta will have to effect the premiums, irrespective of the increasing volatility, and so it gets dangerous to stay more than 3 days in a long straddle or strangle.

Do not trade long strangles of FEB 2016 expiry during the last 5 trading days of this month. Vega will fall very fast due to lack of time – no amount of increasing VIX will help. During the last five days, shift to the March month expiry. That is all trades taken on or after 22 FEB must be shifted to March expiry. Please also note that on the day of the budget, VIX will fall swiftly as its being read, so its very important to stop trading positional long strangles or straddles one day before the budget day, that is 26th of February, 2016.

What To Trade On The Budget 2016 Day?

On the budget day, trade the long straddle only and Intraday only. Huge swings will ensure huge profits. Sometimes 100 points down, sometimes 100 points up, but you target 20-30 points and exit. Do not trade again once you book profits. Take the day off and enjoy. Don’t even look at the markets. If time permits I will write another email on how to trade on the budget day.

Long Straddle or Long Strangle

If you are an Intra day trader I would suggest Long Straddle because in a few hours premiums will not erode and Nifty movement will bring huge profits. Remember that this is applicable to this month only and till budget day. After that long strangle or straddle will become very dangerous to trade. VIX will drop pretty fast taking away all the premiums. After budget these kinds of trades will lose money. That does not mean Short Straddles or Strangles will become profitable.

If you are planning to wait for a bigger move, its better to trade the Long Strangle as your risk will reduce when you buy out of the money options. You can leave long strangles overnight.

Once the budget is over – VIX will fall swiftly and within a few days will start trading in a narrow range making both the long as well as short straddle difficult to trade.

So this advice is valid only until the budget 2016 is over.

Which Strikes to Chose?

For the long straddle there is nothing to be told. You can buy Call and Put Options At The Money (ATM).

If trading Intraday, Long Straddle works great if VIX is increasing.

If you are planning to hold the options overnight then the strike prices you chose becomes extremely important. I would suggest not risking a total of 100 points on one lot trade. So basically the total points you may risk from both the call and put should NOT increase 100 points or Rs. 7500 per lot CE and PE. If its 2 lot 15,000 is at risk.

In reality you will not lose all

Fact is its notional loss. We will look at a profit of 20-30 points that is 20% to 30% return on the long options. OR exit at 30 points loss. VIX will not fall fast. So a combined loss of 30 points in 3 days looks very difficult. And for sure due to Volatility there will be a big move once in 3 days. There you go. That day when the total points of CE and PE exceeds 120-130 odd points – click the sell button on both.

Do not wait for reversal – exit both the positions

Though the possibility of reversal is very high during high volatility times – its a huge risk to get off one side of the trade thus making huge profits and waiting for a reversal. If Nifty does not reverse, then that 20 point profit may go down the drain.

Why are Puts costlier than Calls during high Volatility Time?

Right now, do you notice the difference between At The Money Call and Puts premiums? The reason is pretty simple. During high volatility times there is fear in the markets. The high net worth individuals and institutional investors have stocks worth crores and its a must that they save their portfolio from going down in value in case there is a severe crash. The only way to protect their portfolio is to buy Puts.

Market makers know this. So to make sure that the markets remain a level playing filed for all, they make the Puts costly. Please note that its not done manually. The software controlling options premium knows important event dates and acts accordingly. You see if during these times if Puts are not costly, who will sell puts? For example right now there is panic in markets, can you sell naked puts even 200 points out of the money? So until and unless I am paid pretty well to sell puts I won’t sell. And if there are no sellers, there can’t be any buyers and trading halts. Market makers do not want this to happen, so its obvious Puts will explode in value.

During normal times getting less premium is ok. But when the risk is high why shouldn’t the put sellers get more money to sell these dangerous options.

If puts are not priced high, no one would dare to sell them and the whole market place would stop trading. Also not that as time passes, Puts will get even more costly compared to the Calls. Until of course the budget.

The calls also needs to increased in prices, though not as big as puts just to make sure there is parity in pricing of the options.

Trade Calendar Spreads

Experienced traders can trade calendar spreads. These are spreads where the trader sells options this month and buys far month options. It does not matter which far month – but in this situation its better to be long in March options and Short in February 2016 options.

WHY?

That’s because Calendar Spreads are Long Vega (Volatility). Now its pretty simple to understand that VIX is not going to fall until 29th of this month. However February options have to expire on 25th only. Now whatever the VIX, even 60, on the expiry day it has to become NIL by 3.25 pm. But VEGA of next month options cannot expire so they keep the VIX of 60. Do you get the point?

This situation can be exploited beautifully trading the the Calendar Spreads.

On the expiry day, this months options expire worthless, and there is huge probability to make money from bought next month options as well. So both the sell and the buy trades makes money. 🙂

So the trade is SELL an OTM (Out Of Money) Call Option expiring February 2016, and buy the same strike Call Option March 2016.

Similarly SELL an OTM (Out Of Money) Put Option expiring February 2016, and buy the same strike Put Option March 2016.

Keep an eye an exit at reasonable profits.

Warning: Calendar Spreads are for experienced traders. Its not an easy trade. My course has much better and easier trades than this. These spreads work great when next month Vega will increase and current month Vega may drop or get finished by expiry. As you can see, this is the only month in the year when we are sure of that. The other months Calendar Spreads may not work.

Well for most, budget trading is not a easy trading. Most people who sell options lose big time during this month and they don’t know why. Reason is huge movements like you saw today and an increase in volatility. I am sure a lot of option sellers lost a lot of money today.

That’s the reason my emphasis on hedging. If you lose small money it won’t pinch. Imagine losing months of profits in a single day’s trade. That’s not something you want. My course will teach you better hedging techniques and also strategies that can help you make money from the stock markets peacefully. I don’t promise a lot, like others do, but I can only say that after one year of trading my strategies you will be in good profits. Isn’t it better than losing money trying to make too much money from trading? You decide.

Please do ask questions in the comments section below.

Here is some help for people who have taken my course and are trying to back test strategy 1 and strategy 2 of my course. He is a full time trader since the last 4 years. He has already done the job of back-testing my strategies for you.

If you cannot read the below testimonial please click on the image to enlarge and read. This will help people who trade Strategy 1 and Strategy 2 in huge number of lots:

Testimonial – 30 January 2016 – Results may vary for users – Click on the image to enlarge and read

Here is the text of the email if you are seeing this post on mobile phone and for some reason cannot enlarge the image:

Hi Dilip,

As promised, here is the testimonial.

I am a full time trader since last 4 years. I took your course 7 months back and was really impressed. I had read lot of books before that but your strategy 2 rang the bell in my head.

I backtested 2 years of 15 minutes data of Nifty (Amibroker) and kept on playing with some parameters. I noticed that when VIX > 17 and Nifty premium received ( from Strategy 1) > 0.004 of Nifty current value, results were superb.

In last 7 months, I took 8 trades and all were profitable. The best thing about this strategy is it is scale-able. Right now I am doing it on 14 lots.

Once again thanks for sharing your knowledge.

Please don’t share my name 🙂

Regards,

Name Withheld

See that he trades on 14 lots which is 14*75 = 1050. So basically margin blocked is 40,000 * 14 = 560,000 (Five Lakhs Sixty Thousand.) I think slightly less than that.

Whatever, 3% of 560,000 is Rs. 16,800 per month. Remember that good traders do make more and specially Strategy 2 makes around 5% a month. But lets calculate on the average case scenario on Strategy 1. He has NEVER lost money. So his profits in last 7 months is 16800 * 8 = Rs. 134,400.00.

Remember when you call me to inquire about the course I say success rate is 80-90%? But here we have a trader whose success rate is 100%. If you can time the VIX your success rate also can be near 100%.

134,400 is 24% of 560,000. This means in 14 months around 48% returns. Lets take out 8% just in case he makes small losses in couple of trades. How is 40% return in 1 year and 2 months? And this in the conservative strategies alone. I am not even taking into account what the other strategies can do – the conservative stock option and the directional trades.

One more thing – these are ALL REAL traders doing REAL trades – just like you.

In my view this is MUCH BETTER than what Ravi accomplished. Why? Because he is sticking to very conservative approach and making sure that his growth is slow and steady and forever. No fear, no Intraday – just pure conservative approach to trading.

We have not even looking at the compounding effect this can have. Today he is trading with 14 lots, tomorrow 24 and then 50, 100? Sky is the limit when you trade conservatively. When you know the max loss is 10 or 20 points why stop at 14-20 lots. SCALE. That’s my idea of my conservative and compounded trading strategies.

I hope if you have taken my course, you are enjoying trading too. 🙂

If not here is the details of my conservative option trading course.

Please refer my last post on How To Trade When Volatility is High where in Section 4 I mentioned that you can try arbitrage trading as during high volatility, the Futures premium will swell giving great opportunities in arbitrage trading.

In a nutshell arbitrage trading is an opportunity where the trader tries to profit from the difference between prices of different trading instruments of the same underlying. The most popular of them all is to buy any stock in cash, and sell its Futures. Since Futures has a premium – this is the traders guaranteed profits on the expiry day. On the expiry day price of Futures and the stock will be same, hence giving guaranteed profits to the trader minus the brokerage and the taxes.

I also gave an example of arbitrage opportunity in the stock HDIL with live premiums as on 18th of January 2016. For more details please read this post. Since VIX is high now there will be many more arbitrage trading opportunities in the stock markets especially in the Futures/Cash segment.

One of my blog subscribers emailed me with a few interesting questions. I thought to convert this into a post in itself.

After reading this post you will learn the pros and cons of arbitrage opportunities in stock markets.

Here is his email. Please read his email to understand my answers better.

Hi Dilip,

Myself Abhi (name changed), taken your course in January 2016. Thanks a lot for such a good course. I am really benefited with the course.

Recently I was going through one of your article about arbitrage where you have taken the example of HDIL. What I understand by arbitrage is that if there is any price difference between actual share price and its future price then we can apply this method and it is an guaranteed profit.

Profit = (future price – actual share price) * no. of shares per lot.

I got your point about volatility that due to high volatility price difference will be there to make good profits.

Based on the above here are a few questions I have:

1) Should we really care about volatility? We just need to find the stock whose future price is greater than the actual share price, whatever is the volatility. Finally, at expiry we should be in profit. Please let me know is there any point I am missing here.

2) Is there any scenario where we can be in loss or is this always a guaranteed profit strategy?

3) If this is a guaranteed profit strategy then why this strategy is not followed by lot of people? Also is it not something deserved to be in your course.

4) You have explained all positives of this strategy beautifully. Could you please share some negatives also about it so that we have complete knowledge about it.

Example:

I also searched for TCS. TCS share current price is around 2290 and its March Future is at 2314. So the difference is 24 Rs. As per this arbitrage strategy Rs. 24/- per share is the guaranteed profit at March 2016 expiry. Could you please let me know if I am correct in my understanding?

I searched for this stock only but there might be numerous stocks like this.

Hope to get your reply soon & Thanks a lot in advance.

Thanks & Regards,
Abhi

My reply to Abhi:

Thanks Abhi for the kind words. Its really nice to know my course has benefited you. 🙂

Now to answer your questions:

1) You are correct. Volatility does not matter. If you can find a stock having huge difference with its Futures price, profit is guaranteed. No need to care about volatility.

2) No scenario of loss in arbitrage strategy, though profits are smaller but guaranteed – every time. There can be slippages though and that’s the only issue. For example as soon as you close the Futures trade in profit and the stock falls 1% then that is the risk you need to understand. In such a situation close the stock first, and then close the Future as it is in profit. But then the stock can move a few points up and you may lose the profit in Futures. To counter such a situation I suggest open the trading platform in two different browsers and try to close the both the trades as soon as possible without wasting too much time.

3) Lots of reasons people do not trade this. Here are a few:

a) The biggest reason is that traders simply do not know the arbitrage strategy. Like you discovered after reading my post. 🙂

b) Another reason is, now days its very hard to find such arbitrage opportunities giving meaningful returns.

c) Liquidity in most stocks is very poor in India especially in Futures. You may find an opportunity but you will see that no one is trading. Ask and bid price difference in Futures will be poor.

d) Profits are small. Less than 1% a month is not very attractive. If stock soars, you will not be able to profit even if the stock doubles in 6 months. You will only make 6% in six months that too in the best case scenario. You will then regret your decision to arbitrage.

e) Trades are boring. It is really not very exciting to wait full 30 days and make just 1% on your trade when you can actually make more through the non-directional strategies in my course. Humans hate anything boring. So these trades are not very popular.

f) Lots of cash is required to trade this strategy. Minimum lot size in stock is now 4-5 Lakhs. Over 95% of traders do not have this much cash in their trading account. Those who have, are not satisfied with 1% return a month. They are high net worth individuals, and are willing to take risk and make more. 1% a month is not attractive to them.

For example taking your TCS as example, you will make some Rs. 4800/- in 60 days. TCS lot size is 200 and price difference is 24. So 24*200 = Rs.4800/- is guaranteed profits. Margin blocked in this trade will be 2290*200 = Rs. 458,000/- minimum. This converts to an ROI of (4800/458000) * 100 = 1.04% in 60 days. Approx 0.50% in 30 days. This is NOT a good return in any sense. This when VIX is high. Imagine the kind of returns you will get when VIX will be on the lower side. I have not even deducted the brokerages and taxes. After that probably you get to keep 0.40% in 30 days. In stock markets you should take calculated risks to make more money, but 0.40% return is just not worth any kind of risk. Not even in the US where 1% a month return is considered great.

So why it does not deserve a place in my course? No one would like a strategy that guarantees just 1% or less per month. Convincing people to buy strategies that can make 3% or more per month is difficult; forget about telling something that makes 1% a month even if guaranteed. No one would care for 1% a month strategy, including myself. They will think I am a fool. Also, it will give me a bad name to sell something that only a few people can trade and which is known by most advanced traders. I cannot destroy my name for 1% return a month.

And in fact even I am not interested in selling something that I would rather teach for free.

This strategy has no negatives except poor returns.

All in all after paying brokerages and taxes, you will end up making less than 10% in a year. And since it is almost certain that you will not hold any stock for more than 1 year – short term capital gain tax will come into effect. It will take some more money out of the profits. So you remain somewhere in the range of 7-8% per year. In fact if you keep this money in a good medium to long term debt fund for 3 years you end up making almost 10% a year return and you do not even have to pay taxes on them. On top of that there is no need to look for arbitrage opportunities in stocks and no need to trade as well.

All in all arbitrage is a good to trade only when you are getting more than 2% in a month for the margin blocked, else I would say markets have better opportunities to make money. If you are good trader look for better opportunities to make money.

Hope a lot of your doubts are cleared on the arbitrage stock trading. If there are any more please ask in the comments section.

India VIX is currently at around 20. 20 is considered high VIX, if not very high. It’s great time for option sellers – they get good premiums. But during these times there is going to be an issue. Budget 2016 is coming and this is big news for the markets. So its likely that VIX will not fall too much. Even if it does, it won’t go below 18.

In fact starting next month it will start rising until the budget day when it may fall 10%. I think day before budget it will be at 25 or more and will start falling from the budget day onward.

This is not good news for sellers. If you are an option buyer. This is the best time to do business. But please have a tight stop loss system in your trading plan.

What can sellers do when Volatility (VIX) goes high?

This is a problem traders face worldwide. When VIX is high its great to get good premiums. Due to this traders get lured into selling options only to see huge movements and face losses.

High VIX also means huge volatility, don’t forget that.

So how do you counter huge volatility when VIX is high? Here are some guidelines to help:

1. Since premium is high, reduce the number of options sold. You are getting the same money for taking less risk, why trade more?

2. Warning: Slightly Risky. Sell both ATM calls and ATM puts to get huge premium. This trade is also known as Short Straddle. If you are doing this, trade on a strict stop-loss system.

Lets say if you can afford to lose 20 points – then as soon as you see you are losing 20 points just close the trade. Same with profit booking – book your profits as soon as you get 20 points when you buy back to close. Over a long time this will work. Why? Because option buyers are losers and most of the time sellers win. When you don’t you take a Stop Loss. That’s it. 🙂

If in next 4-5 days there is not much movement and VIX drops by even 2-3% you will get close to 20 points on these two options. Remember that January Expiry is on 28th and there is not much time. ATM options have no intrinsic value, just time value and they have maximum time value than any other strike option. January 2016 options have already entered into the final 10 days. Theta will get very strong here.

For example on 18-Jan-2016 closing basis Nifty is at 7350 and I can see this:

28-Jan-16 CE 7,350.00 99.30
28-Jan-16 PE 7,350.00 82.70

Total premium received is 99.30+82.70 = 182

Sell these two.

Stop Loss will be when the these two become 182 + 20 = 202.
And Profit will be when these two become 182 – 20 = 162.

That’s it more often than not you will profit.

3. Buy more options to cover losses of the sold options. This is a great method if you love hedging. For example you can sell 1 lot of 7350 CE at 99.30 and buy 2 lots of 7500 currently at 36. So basically you still get a credit of 27.30 points. If Nifty expires below 7350, 27.30 points is yours to keep. But if Nifty starts moving up, the 7500 will start bringing double the profit than 7350 sold call losses. You can exit at 20 points profit.

However please understand that this strategy gets risky if expiry is close as you can make a loss in ALL three legs. For example if Nifty closes at 7500, you will lose money in sold options AND lose money in the bought options as they will expire worthless.

So do this when enough days are left for expiry.

4. Try Arbitrage if you have Cash: This is trying to benefit from high VIX when the premiums are high in Futures as well. You can buy a stock in cash and sell its far month expiring Future. For example lets take a high volatile stock whose volatility is high. This is guaranteed profit trade so the quality of the stock or the company does not matter.

See this. The price of HDIL on 18-Jan-16 closing is 65.95.

HDIL 18-Jan-2016 Closing Price

And see this. HDIL Futures expiring in March 2016 closed at 67.50 on the same day.

HDIL Future March 2016 – Closing price as on 18-Jan-2016

Lot size of HDIL is 6000.

So the difference is 67.50-65.95 = 1.55 * 6000 = 9300.

If you close both on expiry day of March 2016 then its a guaranteed profit of 9300 rupees on one lot traded.

Margin blocked will be 66 * 6000 = 396,000. Around 4 Lakhs. Ok the profits are less at around 1% per month – but mind it its a guaranteed profit so even 1% a month is good if its risk free. 12% return in a year without much risk is in my books a great return.

How is the Profit Guaranteed in Arbitrage?

Well its simple mathematics.

Assuming on March 2016 expiry day HDIL is at 100 (best case scenario). Note that on that day premiums from the Futures will vanish and only the intrinsic value will remain.

Profits from cash: 100-65.95 = 34.05*6000 = Rs. 204,300
Loss from the Futures: 67.50-100 = -32.50*6000 = Rs. -195000

Total profit: 204300-195000 = Rs. 9300.00

Assuming on March 2016 expiry day HDIL is at 10 (worst case scenario).

Losses from cash: 10-65.95 = -55.95*6000 = Rs. -335,700
Profits from the Futures: 67.50-10 = 57.50*6000 = Rs. 345,000

Total profit: 345,000-335,700 = Rs. 9300.00

As you can see once the trade is done whatever happens to the stock on the expiry day, you are guaranteed a profit.

But do you really have to wait till expiry?

See this the Futures contract rate of HDIL of the January 2016 expiry:

HDIL Future January 2016 – Closing price as on 18-Jan-2016

Its going almost at the same price 66. There is little difference. What does this imply? This means around Rs. 6000 profit in 30 days. I assume after 30 days the difference between the HDIL Future expiring in March 16 and HDIL cash will be only 3000, so essentially Rs.6000 is your profit in 30 days flat. Hey and this is guaranteed profit. 🙂

Lets calculate ROI:

(6000/396000) * 100 = 1.5% guaranteed risk free profit in 30 days. Isn’t it great?

Note: These are possible only when volatility is high. During low volatility times there is not much of a difference between Future premium and cash value of the stock. Arbitrage is only possible when VIX is high.

There was a time when there were plenty of such opportunities in the markets. Unfortunately many traders started abusing the system and market makers reduced these opportunities. Now these arbitrage opportunities are rare but still if you do some research you will find some opportunity in some stock.

For example I searched an opportunity in HDIL in less than 5 minutes. When you are experienced you can easily find these opportunities. Just target volatile stocks.

Remember that its not just 12% return – you can ask collateral against shares and trade a few conservative strategies and try to make more. In my course there is a better conservative stock option trade which is much better than plain arbitrage. The profits may not be guaranteed, but over a period of time we get that. Its not a big deal.

Also note that when you hold the stock you are also eligible for all dividends. These dividends are tax free.

What more do you want?

Arbitrage is STILL ALIVE Big Time in Stock Markets

Have you heard of Hybrid Arbitrage Mutual Funds? You can see a list of arbitrage funds here in value research. Can you see that 1 year return of all the funds is almost same at 7%? Why? Because all fund managers of these funds are doing the same thing. They buy in cash and sell in Futures. That’s it and chew bubble gum till expiry day. Close the trades and make profits for themselves and the investors. Their job is “trying to find out great arbitrage opportunities in the markets”. They take help from systems and huge data that they have. They still make 7% a year. Imagine 7% profits on hundreds of crores of rupees and get 2-3% of the profits. That’s huge for the mutual fund managers, and almost nil for investors. 7% is equal to inflation. So basically they make huge money and return you the same money after few years. You feel you made 7%, in real terms that is ZERO returns but you end up making crores for the mutual fund managers and the fund house. This is an arbitrage in itself.

You can do arbitrage yourself, and fetch much better than 7% a year. You just read how. High VIX are the best times for arbitrage opportunities. Research now you may find better stocks than HDIL.

5. Even the far OTM options will fetch good premiums. For example on 18-Jan-2016, Nifty 7050 PE was going at around 16. After all what are the chances that Nifty will fall that far after already falling almost 10% in just a few days? Time is running out. Even at a slight pull back of 100 odd pints, this 7050 premium will fall to 5 and you can close with a small profit. This is just an example. You can get better premiums in stocks. Of course do this with a strict stop loss system in place. Pease understand that selling naked options is risky and its advisable you do it only when you are experienced in shorting naked options. Else I recommend learn hedging techniques which can reduce you losses, yet give you ample scope to profit.

What do you do when VIX goes high and there is a high chance its going to stay there for sometime?

First a note for people who bought my course in January 2016.

After the mayhem in August 2015, we are in somewhat similar satiation in January 2016.

The point is every 6 months or so option sellers will have issues in managing positions.

INDIA VIX has shot through the roof and is currently at 20.75 up 12.59% since yesterday at 1 pm today. Nifty is down 1.52% at 7300.00 down 1.79%.

All this because of turmoil in China and Crude prices hitting 12 year low. We all know all this will phase out and again markets will get stable and start rising.

China will act fast and get its economy running again. Demand for Crude oil will start rising due to low prices and it will start going up again. Result? VIX will fall, Nifty will rise. I assume not until the budget is over. VIX will be between 25-30 until budget.

If you bought my course in January 2016, you might be seeing a small loss in the first strategy. This is perfectly OK. This is normal. The strategy works 80% of the times. The rest of the times there can be small loss and we as traders have to accept the fact that no strategy in the world can make money always. I hope you remember that when you call me asking about the course I tell you in plain language that the success rate is 80%. But one thing is guaranteed that over a period of six months you will be in profits.

Another thing that is guaranteed is that you will trade in peace. Even now when we are seeing a small loss we are OK and we know we are better than 95% or traders who may have lost lakhs of rupees during the month of January 2016. Comparatively we are much better.

This is for everyone:

If you are trading with one or two lots there is nothing to worry. But if you are trading with more lots you can do a few things:

1. Close a few lots – half is good enough. This reduces risk. Strategy 1 may hit SL or may not hit SL – this is irrelevant. Right now there is panic in markets, so we will take less risk. When times will be stable we will trade with maximum capacity. Currently its not the right time to be aggressive. PERIOD.

2. Buy more protection. This will give amazing protection. If swift move one side happens with VIX not dropping, it may actually be profitable. One side is guaranteed to make money, the other side will also make money. Try it.

3. Close all option trading and start buying stocks. Remember the phrase – Buy when everyone is selling and sell when everyone is buying. I cannot tell you how many times I have profited from this simple basic strategy alone. Today also I bought my favorite stocks. In fact I never trade options in cash. I am always invested in some stock and ask collateral from my broker. If you read strategy 3 – the conservative stock option trade you will see how beautifully you can use this strategy and make money from three places. Unfortunately traders in India want to make money only in options. This is nothing but ego. For God sake leave ego behind and trade smartly. Money is money is money. How many times I have said in my blog that profits are profits – it does NOT matter from where you get them. The only thing that matters is how much taxes you are paying on that. One year investment in stock and you pay ZERO taxes. Even if you make 10% that is free money. Ask collateral and trade conservative option strategies – and you are now easily hitting 30% + a year mark. You only need to make 20% from trading options. Which you can easily achieve from my course. Remember you pay taxes only on the options profits not on the stocks. How sweet is that?

Agreed stock may not rise. But for how long? Go and see history. Great stocks deliver great returns every three years.

Click here and see this graph of HDFC Bank. You will see 20% compounded return per year return on average whatever happens to the stock markets. Now see its 6 month return, it is almost ZERO. Who cares? Your broker is giving you collateral to trade options – you are making money anyway. One good year and HDFC bank will double – doubling your money. 🙂 How simple is that? But your ego to trade options and make money is actually taking your money away. It is not the stock markets fault. Its your ego and you are not letting it go.

I buy MORE when everyone is selling in panic. Yes and I did that today as well. This is the best time to buy stocks. Some of the stocks will double when Nifty will be at 9000. And you do not need a technical analyst brain to understand that it will not take 5 years reach there. Even in the worst case scenario it will be there in three years. Money doubling in three years – do you really want more from the stock markets? If yes, you will lose half your money in three years. Yes I am not joking. Because you will trade aggressively to make more and lose. Some people are really good at it like Ravi, but can you be Ravi – that is the question.

Do not get me wrong, great traders make amazing returns from the stock markets. But not all can be great traders. Learn to accept that.

Bottom line is learn to use leverage. Options and Futures are leveraged product – why trade them on pure cash?

4. Try the directional strategy: Yes markets are moving and how. On 30% of your capital try the directional strategy of the course. All it needs is movement and you are done. But please DO NOT copy Ravi.

After Ravi’s success story I get lot of emails on teach me to trade like Ravi. In the hindsight what they mean is also tell me the secret to make 40% return in a week. Simply put that cannot be taught, that needs practice and a lots of practice. I can show you the path, but it is you who need to walk not me. Remember on a new year’s eve on a weekend this person was working on the directional strategy. When most of us were having fun, Ravi was working. Why shouldn’t success come to him?

One person who has taken the course told me that he is willing to pay again for the course – but I need to teach him to trade like Ravi. 🙂 The only difference is that Ravi chooses different strike prices on different situations. THE TRADE IS THE SAME. This comes only from experience and practicing. So please practice if you really want to trade like him. I did not reply him I hope he is reading this.

Tomorrow again I will write on how to trade when VIX is high. I hope you will read that as well.

Thanks for reading and being my subscriber.

Note: This in reference to my post on how one of my customers using the directional strategy in my course made an amazing 42.78% return in 5 trading days. This made him richer by Rs. 16.26 Lakhs on Rs. 38 Lakhs margin blocked, of course in 5 days. Note that your results may differ. For more information please read this post:

Customers First Trade Makes 4 Lakhs.

Once I posted his amazing trading results on my website, I started getting too many emails from my paid as well as free newsletter subscribers on how Ravi did it. So I sent him a list of few questions which he replied the next day.

These are some of the questions I asked Ravi and I think Ravi’s reply sums it up all.

Q1) Ravi you are trader par excellence. Congratulations. Can you please first throw some light on your background?

Q2) Are you a Full Time Trader? If yes any reason you became a full time trader?

Q3) We see that you are MBA, CPA and TA. What kinds of jobs you did? Were they anything to do with stock markets? If no where did you learn the art of trading?

Q4) What books you have read to improve your trading and Technical Analysis knowledge?

Q 5) Before doing my course, what was your primary strategy of trading? Was it Intraday, positional or any other. Please also tell the medium of trades – was it on Equity, Options or Futures, or all?

Q6) I am sure before you did my course you traded on the simple logic of buy and sell or sell and buy with a strict stop loss. If yes, what was the strategy/technical reasoning behind taking a call?

Q7) I see that within 2-3 days of doing my course you put Rs. 38 Lakhs on the line on one of my strategies. That’s a BIG decision. What prompted you to take such a huge risk? Did you paper trade for these 2-3 days? If yes did you paper trade on 38 Lakhs?

Q8) You also deviated from the conservative directional strategy. It was Nifty Future Buy but you changed it to ATM Call option buy. I see you have written that you did it to reduce margin requirements. Other than that was there any reason? Please do not reveal the strategy itself. We just want to know the reason.

Q9) Did you paper trade the strategy with the option buy instead of the futures?

Q10) The positional trade was traded Intraday. Was it intentional or you saw that you were making a profit of more than 4 lakhs in a single day so you exited? And by chance the positional trade got converted into Intraday?

Q11) Do you enter the trade in a phased manner, like 5 lakhs on the line, then 5 more, then average the trade with another 5 lakhs until all 38 lakhs is blocked to get better rates on the trades?

Q12) This will benefit my readers who are TA themselves. What is the TA method that you still follow even after hedging?

Here is Ravi’s reply:

Dear Readers,

At the outset, thanks for showing so much love and admiration and a big shout-out to Dilip for his awesome work. Dilip, you have given my trading a astronomical push.

Before we talk about the questions and answers let me tell you – I am a regular guy who has made every possible mistake and has seen a lot of losing trades. The only reason I have started seeing success is because of never giving up and the hunger for learning.

I have decided to write this article as a narrative while keeping in mind to answer all the questions.

My Background

My background in trading and investing goes back some 30 years (I am 39 years old). My grandfather use to buy blue chip companies in the 1970-1990 and it was while reading out the stock quotes from newspapers that I discovered my admiration for the stock market.

My grandfather passed away leaving me a portfolio that contained IPO shares of Reliance Industries, Larsen & Toubro (L&T), Tata Steel and few more.

My background is in software engineering and I got my MBA from a top 10 school in the US. It was during my MBA that I studied futures and options in depth, right to the black-scholes model. I found the concept of options and futures fascinating in terms of trading psychology. A bulk of my TA studies took place while I was getting my MBA.

I use a very basic TA model that is made up of RSI, MCAD, EMAs and SAR. You can learn about these indicators almost anywhere, there is a ton of material on YouTube as well. The key is in the application though. It is my belief that 100% of the traders actually fully know how to trade, its the DOING that gets totally screwed up. So though knowing is important – the doing is the key. I cannot tell you how hard it is. I had to train my wandering mind to focus, be disciplined and I use methods like long distance running and exercising to discipline my mind.

About Trading

I am not a full-time trader as I have other business commitments towards my family business and some other technology projects that I dabble in. I do not aspire to become a full-time trader either. Contrary to what you guys might think, I actually don’t like intra-day it is only if I see a substantial profit that I close trades intraday.

But I do not intend to day-trade – this is a losing game as day trading around the world is fully automated and machine driven. There are better opportunities over positional trades. Its just incidental that last few of my trades have turned out to be intra-day.

Learning the art of trading happens only when you trade. No amount of paper trading can give you that skill. Also its a mind game, so you will win if you have your mind under control even if your TA is suspect. Focus on the mind, focus on discipline and most of all control the greed. Better to have 20 small winners that you can repeat consistently.

Believe me, I have read NO books, all my training is from online resources and most importantly by actually doing stuff and knowing what does not work.

Life Before Hedging

Recently I was fascinated by YouTube material by one ex-GS guy – Anton Kreil. It was during this phase that I started looking up on hedging strategies.

One of Anton’s statements hit me and I quote “Naked punting is for idiots, if you want to be successful and over a long period of time then the hedging is key”. I already knew how to hedge and all the strategies but I never implemented them – see knowing and not doing here. 🙂

My approach prior to hedging was always directional trades with SL and with the consistent pressure of being right – I cannot tell you how much pressure that is and hence hedging. Hedging takes the pressure away and you can be relaxed. I so relaxed now because I know my max loss but I also know that I have time on my hand for the trade to work. Thanks to Dilip for teaching me all the best ways to hedge Options and Futures.

Why Dilip’s Course?

The reason I took Dilip’s course was simple – I thought 5000 for maybe something new, else it is no big deal if this turns out to be a fraud website.

His material turned out to be top class and I immediately incorporated his strategies into my trading.

The risk was almost nil and well you all know how suddenly I was made to recall, remember and see how beautifully hedging works. I know all of you are keen to know my results – let me tell you just because the market has just regularly fallen in Jan, my hedging has alone made me 30% return on the capital.

Now this isn’t rocket science – if you guys did the hedge as Dilip Shaw shows you would have made similar returns, I have no special skills that made me that return. Also, I went into trying these strategies hoping to make 5%-6% a month. I have been lucky by God’s grace that the market has been so highly volatile.

How I Trade Now?

I am quite comfortable with deploying capital when I know a strategy has good chances of working. I did worst case simulations using excel over the weekend on the new year. Only when I knew that the risk is contained I deployed the capital. That amount is of course not my complete capital but it is a substantial part.

As far as deviating from Dilip’s recommendation to buy Futures goes, I did that to keep my capital deployment low. If you buy ATM or just ITM Call instead of the future, it almost has the same effect. But there are inherent risks of VIX but then there is similar risk with Futures of either premium or discount. I choose to buy Calls when VIX is low. I have also bought Futures, and that was my biggest winner.

I experiment with quantities as well. So if price of the Call written is too high, to counter that I buy slightly more Calls or Futures. It is basically to keep the risk well balanced.

Yes, I do enter the trade in 2-3 phases. Phase One is when I know nothing about the direction of the market, after a while you can see the range that is when I add or modify the trade to take a slight bias (either long or short) and the final phase is when the trend is confirmed.

I use statistical methods of Normal Distribution, Volatility and Standard Deviation to calculate the range daily, weekly and monthly.

To give you an example, if my model says with 68% confidence that Nifty won’t break 7300 on a closing basis and 95% confidence Nifty won’t break 7100, I take my chances there.

Similarly I calculate this for daily range. When market approaches one boundary I close out the winning legs of the trade there and then still hold the losing legs with new insurance. If market even moves a little away from one boundary condition I make less loss on the other legs and I close those out.

This is slightly risky and not recommended, it is also very instinct driven in that moment, knowing that there is booked profit that can also act as insurance.

I hope this article gives answers to the questions you all had.

Happy Trading!

Cheers,
Ravi.

A Note By Me To Ravi:

Thank You Ravi. We hope you continue to trade like this and keep giving insights on how you trade so well. Congratulations from all of us.

Disclaimer: Ravi is an excellent trader. The results that you see here is not easy to achieve and your results may differ. Please do your own research before investing in stock markets.

Details about my option course which Ravi also took is here.

Update on 24-Aug-2016: I am still in touch with Ravi he is still doing good, in fact with time he has become more experienced and better. This is natural as you know. An experienced man is much better than a novice man in any job or business. Stock trading is a business and I am sure Ravi will only get better with time like most of you get better with time. I am not sure if your results are going to be similar to Ravi, but yes if you are wiling to work hard like him you may be able to beat average returns that you will make initially after doing my course.

Thanks for reading. If interested how to enroll for the course is written here.

First a Disclaimer: Not every trade can bring the same results but it really helps if you have the knowledge of hedging. Every trader’s results may vary so please do your own research before investing in stock markets. It was because of the hedge knowledge he got from the course that Mr. Ravindra took such a huge risk in his First Trade itself. He is a very experienced trader. It is highly recommended that you start small.

Last month a smart customer took my course and result of his first directional trade is stunning. Yes a 10.65% profit trading Intraday with hedging yesterday. And the best part is the trade was NOT a copy cat as written in the document – he bought Nifty Call Options instead of Nifty Futures buy. The calculated risk paid off. We will know shortly why he preferred to buy the Call Option instead buying a Nifty Future.

See his yesterdays’ email (please click on image to enlarge to read properly):

Testimonial by Ravindra – January 2016. 10.65% Profit Intraday Rs. 4.05 Lakhs in Directional Strategy of My Course – Results may vary for users

Some guys are smart really. Hey don’t we have students better than teachers all over the world. 🙂 Well it looks like its in my case as well and am so proud of my customers. 🙂

Now if you work this out it is (4.05/38) * 100 = 10.65% ROI (Return on Investment). So this looks like a great return. I have always said, people who can master the directional strategy can make more than 3% a month. Some are making more than 3% per month even in non-directional. 🙂

Whenever you are taking the directional trade you should know your maximum risk BEFORE you take the trade. People who have taken my course know that profits can be unlimited especially if you are wrong in predicting direction.

And how many times did you took the Nifty Futures trade and got the direction wrong? I am sure most of the times. But what if you can make more money if wrong? 🙂

Note: Ravi converted the positional directional trade (Futures hedged with Options) into an Intraday trade. It was an Intraday trade done Monday, January 04, 2016. Please also note that he did not buy the Nifty Future, but bought the Call as he wanted to go long on Nifty, but was horribly wrong and was awarded Rs. 4.05 Lakhs by markets in a single trading day because he was wrong in predicting direction. How many times has that happened to you? 🙂 Aren’t we punished by markets whenever we are wrong? Add to that the worries we have, when we trade Nifty Futures naked (means without hedge). All that worries will go if you are hedging.

He also bought the Call Option to save money on margin. For Future Buy/Sell your broker will block at least Rs. 40000-45000 for 1 lot Nifty. But here he pays the option premium multiply by the number of shares bought. This reduced his margin by a whopping 75%. He traded in 7500 shares or 7500 / 75 = 100 lots. This is another reason why he got an increased ROI.

If you have taken my course please do not ask me why he bought a call. This was a smart move by the trader – more to do with trading with less margin and to get an increased ROI. This is where your brain comes in. 🙂 Returns will be more if you can use your intelligence plus the knowledge you get from the course.

How many times you made money when you were wrong in direction? None I think. That is what I call beauty of hedging. It not only protects your capital but it can make money as well.

Agreed it will not make money always – but understand this – when it makes it makes unlimited money and when it losses the losses are limited and you can wait for profits to come. Two great trades and you are done for the month. On top of that, you need not be correct on direction. What more do you want?

When I replied “great trade” this person replied this:

Testimonial by Ravindra – January 2016. 10.65% ROI in Directional Trade of My Course – Results may vary for users

Update on Monday, January 04, 2016:

Now this is amazing. As promised he shared his trade details done today. Ravi had another great day. He made another Rs. 1.80 Lakhs trading Intraday on the same directional strategy only with options. Surprisingly there was no movement today, but still the trade made a profit. Note that the trade needs movement to make money. It does not matter which side.

See this:

Testimonial by Ravindra – 05 January 2016 – Intraday Profits – Results may vary for users

So profits in 2 trading days:
Rs. 5.85 Lakhs on 38 Lakhs.

ROI (Return On Investment): (5.85/38) * 100 = 15.39% in 2 trading days. Amazing. Hats off to him.

I have written him to continue sending the trades so that I can see if I can convert this into Intraday Trading. Lots of my subscribers are looking for Intraday strategies – and if research proves it to be good then lot more traders can benefit.

I personally do not like trading Intraday, but if something good comes out – then I am Ok.

Lets wait and watch how this one plays out. I will start start doing some research on this.

Thanks Ravi for trading with Guts and Brains. Like I always say: If you are doing it right, hedging your trades, and know what you are doing – over time you will make money.

Calculated risk taking traders will play out well in the long run, speculators will phase out in long run. Unfortunately humans love to gamble and therefore more than 95% of traders are gamblers who lose money.

I hope you do not.

Reply by me – Results may vary for users

Update on Monday, January 06 2016:

Mr. Ravindra has another Roller Coaster Day. Makes Rs. 4.76 Lakhs Profit on 45 Lakhs margin blocked. Here is his today’s email.

4.05 Lakhs + 1.80 Lakhs + 4.76 Lakhs = Rs. 10.61 Lakhs Profit in 3 Intraday Trading Days – Results may vary for users

I have got just too many requests today from my clients to share his trade details and I have not sent it to single person. The reason is pretty simple. I want to be 100% sure this directional trade can be converted to intraday trading. Until and unless I am not pretty sure I will NOT share his details.

Today he took some risks. There were a total 4 trades and he booked profits in ALL the trades. Since it was intraday he kept booking profits in different legs at different times. This is his intelligence and the credit goes to him.

Yes he took calculated risk for the day and it paid off since he knew even slight whipsaw (change of direction) of Nifty will bring him profits in all legs. It worked.

Very Important Note: Mr. Ravindra took the course on 26-Dec-2015. Paid 5000. Did not email me for a single doubt and takes his first trade with a margin of 38 lakhs. He has experience of 5 years in options trading. How many of us even with 10 years of experience can do a course and risk 38 Lakhs on a single trade? This person has the guts. Even if you are a crorepati can you risk 38 Lakhs in your first trade after doing a course? On top of that he converted the positional trade to Intraday. Which means he is very experienced and smart trader. This is the reason I am not sending his trade details to anyone right now. People will start copying.

But its easy to know what he did which is there in his email itself. Except for today’s trade where he did buy Futures, he just bought the ATM Call Option instead of the Futures. Rest of the trade remains more or less same. So please look into the document I sent you and start experimenting. Paper trade first and see how it goes. Then do the real trading on a single lot. Remember he is doing it Intraday – so paper trade Intraday only.

Ravindra’s total profit in last 3 trading days:
4.05 Lakhs + 1.80 Lakhs + 4.76 Lakhs = Rs. 10.61 Lakhs
ROI: (10.61/40) * 100 = 26.52% in 3 Days.

Amazing!!!

Enjoy Ravindra Hats Off.

Ravindra’s total profit ending this week is Rs. 16.26 Lakhs on Rs. 38/- Lakhs margin blocked

Ravindra’s total profit ending this week 4th to 8th January 2016 is Rs. 16.26 Lakhs on Rs. 38/- Lakhs margin blocked. This is (16.26/38) * 100 = 42.78% return in 5 trading days. Humongous!!!

In the last few days I got many requests from my paid as well as non-paid customers to show his trading details. Unfortunately Ravindra was NOT comfortable, but when I told him his personal info will not be revealed he readily agreed.

Here is the screen shot of his profits for the week taken out from back end of Zerodha.

Rs. 16.26 Lakhs on Rs. 38 Lakhs margin blocked. 42.78% return in 5 trading days – Results may vary for users

I got quite a few emails where some people suspected this to be fake. Let me tell you that I do not lie, at least on this website. I know you people trust me and breaking trust is something I am yet to discover.

But please remember these kinds of returns are not possible from every trade or trader. You must have expertise like Ravi to get such kinds of returns. Look at his qualifications – he is MBA and CPA. And am sure he was doing good even before he took my course.

Here is his email:

Rs. 16.26 Lakhs Profit in 5 Trading Days – Results may vary for users

I do not even take credit for his returns. He learned hedging from the course and took advantage of the knowledge – that’s it. Note that he changed the strike prices as per his views that day. Even entry and exit of all legs were timed differently. This cannot be taught in a course.

This is something that will take you months to master. Therefore even I was reluctant to show his trade. Next day Nifty changes and so the strike prices – but I know there are lot of people with a lot of money who would try to copy the trade and of course fail and blame me for that.

He commented below is apt, which I must mention here:

Dear Dilip,

I cannot tell you how much of an eye opener your hedging techniques have been. So far I use to work with a strict SL and now with your hedging techniques I can take more risk knowing that there will be multiple exit opportunities for each legs of the trade.

Anyway – my humble advice is , mastering the 3%-4% returns per month trades until one has the epiphany and starts his/her own financial engineering. Bottom line is, understanding the setup and the strikes. It comes with experience and most of all by making mistakes 🙂

Cheers,
Ravi.

I have therefore hidden the strike prices but people who have taken the course may get some idea about it. But please understand that even I do not know when he entered and exited the trade. Guess work can be counter-productive.

Ravi has promised me to come with a white-paper on this. And he also wants to write on this blog for free. He is a class apart trader and therefore I think he fits great to write for us and help this community.

And most importantly he is NOT charging me anything to write in the site. Thank You Ravi. We all will be really grateful to you, especially the Technical Analysts who visit this blog. All articles written by him will be attributed to him.

Thank you for this extraordinary week Ravi. We all learned a lot. 🙂

Very Imp Disclaimer: These results are typical and its not guaranteed that every trade will produce the same or similar results. However the hedging methods in the course will help you to take such aggressive trades even with a lot of cash. Because you know that capital protection is there no matter what. Smart traders will always make more.

If you are an experienced Future trader I can only say that the hedging methods in the course will help you a lot. Since this hedging will take stress off your mind because of either limited losses or unlimited profits, you can trade better and make better income.

After the course you will actually start looking for the worst tips providers in India and hope their Future direction is wrong. No I am not joking – this is how you can make more money. 🙂 Well you still make money, though limited if right.

Details of the course is here.

One of my customers who took my course exactly 12 months back made my day on the first day of the year 2016. Of course this apart from hundreds of emails and WhatsApp messages from my subscribers wishing me and my family a very Happy New Year. By the way, how many owners of businesses/websites in the world can boast of HUNDREDS of customers/subscribers wishing them on Happy New Year and also on festivals? You may have also received many messages in new year form various companies or businesses, but how many of them you replied back? Not trying to show off, but just sharing happiness, to double my happiness. 🙂

Some of my competitors in similar business may be far ahead of me in terms of “making money from giving option tips or course” (and I don’t care), but they are not even slightly close to the kind regards and love my subscribes have for me. Its easy to make money but its very hard to win hearts.

A Heartfelt Thanks To You All. Thank You So Much for the Love, Blessings and Regards for me and my family.

If I find time I will upload the screen-shots of the messages in my website so that it is etched in my memory for the rest of the year that a lot of traders in India are looking forward to help from me and I need to work. Thanks a lot, whenever I will feel down or need some motivation – I will look into those messages again.

Now coming to what the special message was on 1st of January 2016? Nothing except this person took my course in January 2015 and made profits continuously – so much so that he wants me to help him know “What To Do With Option Trading Profits” made from the course. This is awesome. This is the EXACT purpose of the course – to make small profits from the stock markets, compound it and make it into a BIG Profit. And when you find it hard to manage the profits, take some money out and invest it into other areas of stock markets and to let it grow on its own so that it at least beats inflation. And over a period of 10-20 years make it HUGE so much so that if you want you can retire rich.

But this email was unexpected as I thought it will take at least a few years before a customer would ask me this question. It is actually surprising that it came in his first year of trading options. Another surprise was that I thought someone from Mumbai, Ahmadabad, Delhi or Bangalore will ask this question, but this came from a trader living in outskirts of Kolkata. Amazing! 🙂

That is the reason why you should also read about other areas of stock markets like mutual funds, stock investing and any other investment opportunities that can make more than inflation with low risk.

Some money should make more or less the same as inflation (Bank Fixed Deposits), some money should make more than FDs (mutual funds), some money should make more than mutual funds (stocks), and some money should make more than stocks (stocks combined with derivatives with proper risk management/hedging.) This is how I manage my financial portfolio and risk. Please do not copy, your investment profile and needs may differ from mine though you must read to get some ideas on investing.

So here the screen shot of the best question and testimonial I ever received since I started this course. Remember it is NOT about one or two profits – it is about PROFITS made from the Course OVER ONE YEAR. And that’s HUGE. Please click on the image to enlarge and read properly. Read my reply as well. Or scroll down to read what my customer asked and my reply as well.

What to Do with Option Trading Profits – Please click to enlarge

Here is the same email and my reply in text:

Dear Dilip da, (People in West Bengal add “Da” at the end of First Name just like most people in North India add “Ji” to show their regards)

Wish you a very happy and prosperous new year.
I am trading your strategies and getting a decent return. I am keeping the profit in my trading account as I have no idea to roll my profit money. It will be very helpful for me if you guide me how to invest my profits earned from option strategies.

Regards,
Rupesh

May Reply Was:

1. Either take them out and keep them in liquid funds for a 8-9% yearly return, (best option if you are not willing to take any more risk with the profits made). Or,
2. Do a monthly SIP in a top 4 or 5 star Large or Mid Cap equity fund like Birla Sun Life Frontline Equity (Growth) Fund, (Growth Fund to Compound the Money, unlike a dividend fund which will give back profits made occasionally therefore killing the chance for the money and profits to compound). Or,
3. Invest in 10-12 high quality stocks that you think may become multi-baggers in a few years. Or,
4. Just keep the profits in your trading account and increase the number of lots traded, until you think you can handle. Once you get uncomfortable trading the lot size go back to either 1, 2 or 3.
5. Be happy with money compounding over the years.

Thank You Rupesh. I started providing conservative option course in May 2014 and I think you took it in January 2015 – one year back.

Exactly after one year you are asking this question. I am so thrilled and happy to read your email. You are not only making profits but also are looking to protect your profits to compound. Great thinking.

Thank you for being patient and being happy with small profits every month and not taking undue risks with my strategies. This will go into one of the best testimonials I ever received as this is exactly what I want from people who have taken my course. Make small profits, compound and then shift the big profits in other investment vehicles of stock markets to protect and make a huge amount over a few years. And then retire rich.

I wish you Good Luck Mr. Rupesh.

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NOTE: 3% per month can be huge over the years, it is much better than trying to make 10% a month and keep losing. If you want to make the year 2016 profitable trading options learn conservative and peaceful trading. My course will help. Read about my conservative options trading course here.

Testimonials of the Year 2015.

You Can Pay Online Here in 1 Minute.

What are you doing with the profits made from Trading the Stock Markets, Options, Futures or Commodities?

I work hard to provide real practical wisdom and correct knowledge in options to my dear retail traders, who are not very rich but want to get rich trough my website www.TheOptionCourse.com. I try my best to tell them you cannot get very rich very fast trading stock markets, but you can get very rich in a few years trading the stock markets. If I am unable to convince them, unfortunately markets convince them. Hope sense prevails and Your Year 2016 is filled with Lots of Happiness, Great Health and Sound Investments.

I am truly overwhelmed from the response I got from my newsletter subscribers & customers. Hundreds of them wished me and my family “Happy New Year” on the first day of the year 2016. Some of them wished me even before I wished them through my newsletter. This shows tremendous support and regards I have in my subscribers. I feel blessed.

But with support, regards and hope comes great responsibility. So I am a bit overwhelmed. I will work harder this year and try my best to teach this community about stock markets, trading and investments as much as I can. Let me tell you I have a lots of regards for this community. Retail traders want to grow rich through trading, but they do a lot of mistakes. I will try to tell them the truth, that’s all I can say. Lets all wish Year 2016 is great for all of us.

Thanks. Some of the screen shots of the wishes are uploaded here:

Form Me & My Family, Here’s Wishing You and Your Family A Very Happy New Year 2016

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