What is the “edge” you have in the markets?

K

kkseal

Well-Known Member
#51
#51
Re: What is the edge you have in the markets?

kkseal said:
CV, if you're using some form of the Stat Arb method, could you cite a test case in current mkt Could RNRL be a valid choice?

Regards,
Kalyan.
Click to expand...
And if you're dealing in pairs how about the JP ASSOCIATES-RNRL pair?
Is this a valid pair?
If so, what kind of price movements would you expect?

Regards,
Kalyan.
 
S

SGM

Active Member
#52
#52
Re: What is the edge you have in the markets?

Hello Kalyan

To start with just focus on delta for the option pricing model, assume that all other things are equal. Then it would be possible to model the price change in an option wrt the price change in the stock/index.

Usually the At The Money options have delta of 0.50, so the option moves at 50% gain/loss initially (Note that as it goes in the money the delta keeps increasing towards 1).

If you want to be an options buyer, as a rule of thumb, buy options that are In The Money or deep in the money for a better RR (need to look out for liquidity issues specially at projected target areas). Infact there is a small edge right here for you.

All the greeks are important, but to start with if you just focus on the change in premium as the Strike Price Moves towards / away from the CMP, you will get the big picture (Option Payoff Diagram), maybe I will compile that for NF and post it here.

Regards
Sanjay
 
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B

beginner_av

Well-Known Member
#54
#54
Re: What is the edge you have in the markets?

kkseal said:
Well Avi sir, to begin with i'll put two questions for you - one specific & one more general

......................................

Thanks & Regards,
Kalyan.

P.S. Another thing BAV how do you get the daily IV value for a contract? Is it possible to automate the calculation in Ami ?(actually i want to create an indicator out of the IV values).
Click to expand...

dont want to hijack this thread. CV's comments on edge would be extremely useful. So going to my giant dead thread to answer you.
 
K

kkseal

Well-Known Member
#55
#55
Re: What is the edge you have in the markets?

Thanks Sanjay, Avi. Will answer in the evening as currently stuck with some work.

BAV is right about not hijacking this thread. Maybe the pairs question can be discussed on the thread on pairs trading.

Regards,
Kalyan.

P.S. CV seems to be busy milking CHEVRON/EXXON or maybe the Dow in general. ;) That makes another (inverse) pair - CHEVRON, EXXON - short, BPCL, IOC - long :)
 
K

kkseal

Well-Known Member
#57
#57
Oh yeah, if big brother cracks doubtful if anything will hold. But CHEVRON, EXXONN may still be good for today (gave better % returns than the Dow yesterday).

Anyway switching over to the 'awakened giant'

Regards,
Kalyan.
 
T

TraderInTheZONE

Active Member
#60
#60
I have read literally 1000 of books on market in last one year. And My Edge is that "I don't believe 998 of them".
My biggest edge is :
(1) There are only two books that I completely agree with. They are : (a) Trade your way to financial freedom by Van Tharp. (b) Trading in the Zone by Micheal Douglas (As you can see in my Avatar name :) )
(2) I believe without any doubt that any thing can happen in market
(3) I believe : "The simpler your trading system is more robust it is"
---------------TIZ----------------
 
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