I know it is ridiculous if any body says any strategy working 100% in all market conditions.
I am here assuming a hypothetical scenario. Suppose if any strategy developer proves that the strategy works 100% in all the cases; which is easy to execute; which gives a swing profit of say e.g. 5% move in stock or index; would big people like e.g., mr.nithin of “zerodha” or mr.nikhil of “true beacon” would consider buying it? If so what would be the market price for such 100% working strategy they would be paying it to the strategy developer?
If you have a 100% working strategy – why would you want to sell it ?
Why cant you use it??
ha ha lol sorry its just a hypothetical scenario. I am just curious to know it from the knowledgeable people here.
P.S. I have not developed anything. I just try to scalp using 50 ema for 0.25% percent move if any
Works 100% fine, but what about the longevity of the success, and the refinements one could do to better the model, the competition that will be coming up, will there be an alternative, a replacement, will it be treated as a nice product or a commodity, will it have geographical constraints like working in only emerging markets, rapid growth markets or does it also work in matured markets, will the return be the same or changes in different scenarios etc etc.
So yes, just like any other product, just like any business, there are a lot of things that should be and will be considered.
I do believe in the Risk- return tradeoff theory.
Any strategy that’s giving more than risk free rate of return, must carry some inherent risk.
In case you find something that’s 100% safe, and makes money – you should know you’ve not considered all scenarios.
Would be worth 0 since you would be repainting something.
There is a strategy that has worked 100% since time immemorial.
ACC is trading at 2369.25.
It’s 2300 CE is trading at 136.
Buy the shares, 250 qty and sell 1 lot of 2300 ce.
Your profit will be (2300-2369.25+136)*250 = 16,687.
Total capital required for that trade will be around 7.41 lakhs. Which makes the monthly return to around 2.25%.
Now, please anyone, give me around 10 crores of capital as a loan. I promise I’ll pay an interest of 12% per annum. Please.
Edit- There’s a way to earn even more than this. Ofcourse we can short a OTM call. Say we short the 2400 ce which has a premium of 83.95. By expiry, if the stock remains between 2380 and 2400, you’ll have your cake and eat it too.
If say, the stock by expiry reaches anywhere below your buy price, close the 2400 ce (which has already by that time given you a good theta decay) and short any ITM call that maintains the difference in strikes.
There have been years when I netted 30-35% roi. The only limiting factor here is the constant rise in the stock value, which means you’ll have to put in more money to buy 1 lot in the future.
Unlike the US, where a lot is 100 shares of anything valued at anyprice.
You promise is it? Okay then.
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Like I said before, you have just not considered all scenarios. You are just selling a covered call. What if ACC falls to 1500 afterwards. You pocket the 136 premium but lose the value of your holdings.
I guess next you’ll sell 1500CE, and before you know, ACC will go back to 2300. You may be able to keep your CE premium but how about the 800 loss in the holdings?
Read again, there’s no risk in selling itm calls that have extrinsic values left.
You can initiate the trade at the very first day of the month and you’ll have far more premium than the 136.
Once you do that, doesn’t matter where the stock goes, even if it’s till 1 or at infinity. You’ll just deliver the shares at 2300.
Yes, there’s a risk, but in selling otm only. Not in itm.
Compulsory physical delivery, you see, is the reason here. The buyer of the itm has no choice but to buy it from me.
Why ACC, why not other stocks?
Any stocks can work. I just gave ACC as an example.
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