MARKET MANIAC

FDP on SAPM @ Coimbatore

2012-01-27T05:59:00.000-08:00

I am delighted to be invited as a resource person for FDP on SAPM.

The FDP is on 8th Mar 2012 at Srivenkateswara Group of Institutions.
Topics I am going to cover include Security analysis & Portfolio management and Psychology of Investing.
I will use Bodie, Kane, Marcus & Mohanty for the Forenoon session
For psychology of investing text by Mark Hirschey & Nofsinger
It will be great to use NCFM materials to understand Market design.

MRCET GUEST LECTURE on Indian Financial Markets

2012-01-27T01:41:00.000-08:00

Today, I had the opportunity to give a lecture on Basics of stockmarkets at MRCET, Maisammaguda,Secbad.

I have found their hospitality very warm.
It was mostly an interactive session
Students cleared their doubts and very interesting questions came up.
I am planning to attend and present a paper in their conference.

Security Analysis & Portfolio Management

2012-01-25T22:06:00.000-08:00

SAPM or IAPM or Investments is a popular course among students of MBA Colleges and B-Schools.
I would like to muse over the SAPM subject as it is close to my heart.

Syllabus of SAPM in JNTU and Investments in OU are well designed and it will glow in the hands of an experienced teacher.
The teacher needs practical understanding of Risk and Speculation. Otherwise he will not have faith in the Speculative price discovery as the soul of a market.
I found excellent empirical examples from NISM's EERF program. Dr K Kiran of NISM is really fascinating in his energetic presentations of Finance and econometrics.
SAPM can be enriched substantially with data from BSE, NSE, MCX and SEBI

Interesting Readings

2012-01-24T05:19:00.000-08:00

The following articles are interesting and cover wide range of issues.

PISA results for India. A cursory glance at mushrooming engineering & MBA colleges surrounding Hyderabad and interaction with the students during my activities is a grim reminder of the many things in the report.
Accountability in Education posted in Ajay Shah's Blog.
Article on Valuation Metrics.
Dr Pitabas Mohanty of XLRI on valuation and lot of interesting posts.
Another good postings by Sanjay Bakshi on Valuation

SEBI's controls on IPO Listing day Volatility

2012-01-24T04:38:00.000-08:00

SEBI released trading controls for Listing day IPO price fluctuations.

I have earlier commented on IPO Listing day volatility.
SEBI has responded with lot of sensible measures to tame down the Volatility .
The detailed sebi circulars relating to this.
A good paper on Call auctions by a respected financial economist Dr Susan Thomas
Whether this affects price discovery, liquidity and Broker funding for IPOs remains to be seen.
Research paper on IPO Volatility. The abstract seems interesting at Indian Journal of Finance

Aiming for NSE Certified Market Professional Level 5

2012-01-18T23:57:00.000-08:00

I have taken 4 NCFM new modules on 18th,19th Jan 2012.

I have succesfully completed all the four modules ie IAPM, Securities Market ( Advanced) Module, Macroeconomics for Financial Markets Module, Fundamental Analysis Module.
This gives great satisfaction for me for getting eligibility for NCMP Level 5.
NCFM material is very free flowing and highly relevant for all MBA students. I would recommend to freely down load and improve the knowledge base of Finance students.

Guest Lecture @ ASTRA on India's Financial Markets

2012-01-07T22:03:00.000-08:00

Guest Lecture on India's Financial Markets @ ASTRA

I am planning to give a 2-hr guest lecture on India's Financial Markets at ASTRA
The topics I am planning to cover are Basics of StockMarkets with latest examples
I plan to emphasise on Data orientation from NSE, SEBI etc
This will be useful for their SAPM, Derivatives also
Project work orientation will be provided to students.

Books on Analysing Financial Data

2012-01-03T03:52:00.000-08:00

Financial Markets always fascinated me. In my search for books about analysing financial data I came across many jewels some of which are available on the net for the motivated student of Markets.

Analysis of Financial Data by Gary Koop
Financial Market Analytics by John Teall
Financial Time Series Tsay
Market Models by Carol Alexander
Basic Econometrics by Gujarati
Financial Econometrics by Fogler and Ganapathy
Econometric Modelling of Financial Time series by Terence Mills
Elements of Forecating by Diebold
The Econometrics of financial Markets Campbell, Lo, Mackinlay
Introductory econometrics for finance by Chris Brooks

Wishing You All a Very Happy New Year

2011-12-31T21:55:00.000-08:00

BlackSwan FMS wishes all readers and investors and students of Financial Markets a very happy and exciting New Year 2012.

India's Financial Markets - A guest lecture

2011-12-27T04:18:00.000-08:00

RLP Securities, a member of NSE in the interest of promoting Market awareness would like to provide a free of charge guest lecture to any MBA college or B-School.

It will be of 2 hr duration.
Covers broadly the Indian Securities Market on the lines of NCFM Securities market Advanced Module.
The students will have the benefit of learning from Market practitioners and live market data is used for exemplifying the concepts.
Interested people can contact Gangineni Dhananjhay 9391319721 for further details

Coaching for MBA Finance Students in SAPM & DERIVATIVES

2011-12-27T04:10:00.000-08:00

We at BlackSwan Financial Markets School have started an initiative to train MBA Finance students in the areas of Security Analysis & Portfolio Management and Derivatives.

This is a 40 hr program. Daily 4 hrs for 10 days. Starts from 4th Jan 2012.
This program would strengthen their foundation in SAPM.
I would like to use INVESTMENTS by BKMM and NSE's IAPM workbook.
This training will be of help in doing MBA Finance projects also.
Mr Harikrishna Karri a well known MBA Finance faculty will lead this MBA Tutions project.

India Finance Confrence 2011

2011-12-20T05:21:00.000-08:00

I have traveled to Bangalore to attend IFC 2011 @ IIMB.

Today is the pre conference tutorial day. There were two sessions on Stochastic Caluculus and International Finance. More than 50% gone above my head.
I could make friends with one person who has done his PGDM from IIMC and presently working with CBIT. We had good conversation.
I am very much impressed by the ambience and style of IIMB.
From IIMB store I purchased two T-shirts and carry bag for their brand value.
I spent good amount of time at their library.
From tomorrow the actual conference starts.

Quant Finance - Books I am reading

2011-12-17T21:27:00.000-08:00

I am fortunate to get hold of three books on quant finance - Thanks to my friend B N Reddy who has kindly brought it from USA via his daughter. I find it very common to see people who have not read any literature on quant finance to deride it which has become a fashion.

FAQs on Quantitative Finance by Paul Wilmott. A legendary name in Quant finance and creator of CQF.
My Life as a Quant by Emmanuel Derman. A physicist's take on Finance and markets.
Quants by Scott patterson. Where he sketches about colorful personalities like Aaron Brown, Paul wilmott, Ed Thorp, Jim Simons .
I like to think Victor Niederhoffer of DailySpec as the original quant.

Committee Reports on Indian Markets & Financial system

2011-12-17T21:18:00.000-08:00

There are important committee reports on Indian Financial system at various points of time. This is an effort to gather them. Any serious finance student should be aware of their contents and be able to quote from them. I have collected here reports which are latest and available on the net.

Top of mind is Dr Raghuram Rajan's CFSR. It is a must read and contains excellent exposition of Indian financial system.
Another report is MIFC by Percy Mistry.
Bimal Jalan's report on Stock Exchanges Ownership
J R Verma Committee report
LC Gupta committee on derivatives
Narayana Murthy committee on Corporate Governance.

Day 1 @ QFW 2011

2011-12-15T05:55:00.000-08:00

I had the pleasure of being a participant at QFW 2011. Some of my observations are

We had a pleasant welcome by the Coordinator Dr Sastry and interaction by Director IDRBT Dr Sambamoorthy. Infact the Director's remarks are very relevant and interesting.
Inaugural address by Dr Subir Gokarn focused on financial system design and macro perspectives and how quantitative models can be addressed to real life problems.
There was a fascinating overview by Dr Aparna Gupta of RPI on the Quant Finance.
Dr RNS Gupta of IIT- Kanpur had given a talk on probability and statistics.
Very good intro on ANN by Dr Ravi of IDRBT
I had nice interaction with Dr Aparna Gupta of RPI, made friends with lot of participants like Dr Prasad from IIM Indore, Crisil and Other participants from XLRI School of Business and IGIDR, MSE.
One faculty member from IIMB was very active and posed lot of interesting questions. She is from the area of Investments which I had later found out from interactions with her.

QFW 2011 - Workshop on Quant Finance

2011-12-13T01:37:00.000-08:00

I am happy to be selected for the Quantitative Finance Workshop ( QFW 2011).

QFW 2011 is scheduled for DEC 14- 17,2011 at IDRBT , Hyderabad.
Topics are very interesting ranging from R to ANN.
I am looking forward to meet John Teall , former ASE Member and author of FINANCIAL MARKET ANALYTICS.
This is a prestigious program co-conducted by IGIDR, IIT-Kanpur, RPI, IDRBT.
I hope to brush up my R skills with finance examples which have been generously shared by Dr Kiran of NISM at his EERF 2011.
Perhaps I can connect better with Dr John Teall with his Stock exchange and academic background.

Trading platforms in Indian Markets

2011-12-09T06:33:00.001-08:00

Often students new to the markets want to know various types of Trading Platforms/ Softwares available.

NOW : This is the platform promoted by NSE. This is abbreviated as NEAT ON WEB. NEAT Stands for National Stockexchange Automated Trading. This I found to be of great interest to jobbers or Day traders as its response time for orders is very high. NSE quotes

"NSE today allows members to provide internet trading facility to their clients through the use of NOW (NSE on web), a shared web infrastructure.''

2 . ODIN : This is a trading platform of Financial Technologies which is a pioneer in this area and promoter of MCX and MCX-SX. ODIN stands for Open Dealer Integrated Network.

3. FOW : Fast Trade on Web. Detailed description here.

    4. BOLT

     5. NEAT

     6. Trade Tiger

   7. Trader Terminal

     8. PIB :

Some Good Books on Academic Finance by Mirza Rafath

2011-12-09T05:08:00.001-08:00

I have seen the blog of Mirza Rafath who is a MBA faculty and runs highly successful training for students.
I quote his comments on two books which I also liked most when as an associate professor in VJIM. I have adopted those books for my finance specialization classes. I really cherish that experience as the students are very demanding and expected the best. I learned a lot from them.

The Second preference must be given to the Text Book of P.G. APTE’s “INTERNATIONAL FINANCIAL MANAGEMENT”. Almost all college libraries will definitely have this book. The book covers more than 90% of the syllabus and is written with Indian perspective. Any student who wants to follow OU MBA SYLLABUS for IF must prefer P.G. APTE’s books. This book provides knowledge + covers majority of syllabus. IF any student is interested in using both books Levi’s and Apte’s, then that would be excellent because one gives international exposure and the other Indian.

Another best book by foreign authors is INVESTMENTS: ANALYSIS AND BEHAVIOUR BY MARK HIRSCHEY AND JOHN NOFSINGER TATA MCGRAW HILL (SPECIAL INDIAN EDITION).

Link to Mirza Rafath's BLOG.

IndiaVIX

2011-12-08T19:23:00.001-08:00

I post here an abstract of a paper on IndiaVIX which is under review of Indian Journal of Finance coauthored by myself, Dr D Raghunatha Reddy of JNTU SMS, Dr TNL Prasad , DGM ( Finance ) of NCC.

INDIA VIX: Examining the Negative and Asymmetric

Volatility Index – Market Return Relationship

This paper examines the behavior ofIndia Volatility Index (India VIX). Westudy two aspects: First, the negative correlation between changes in India VIX andmarket returns. Second, the asymmetric nature of the changes in India VIX with respectto market returns. S&P CNX NIFTY Index has been used as a proxy for themarket and the study period covers March 2009 through November 2011. Using OLSRegression method on daily data this study finds an inverse relation betweenmovements in IndiaVIX and movements in the NIFTY. The study reveals the asymmetric nature of theVolatility Index- Market Return relationship. This study is useful forunderstanding the behavior of IndiaVIX and helps policymakers in the design of appropriate instruments based on India VIX forhedging and risk management.

Keywords: Volatility Index,Hedging, Derivatives, Indian Stock market

Improving MBA(Finance) Education at Colleges

2011-12-04T08:10:00.001-08:00

Some observations of my experience of teaching and interacting with MBA( Finance) students at Colleges on how to improve the quality.

Usage of NCFM Materials : These materials will be useful for correct and latest understanding of market structure and deign. Some of the textbooks are at least 5 years out of touch with market realities.
Market Simulator : Finance students can get real feel of the market by using tools like NSE pathasala.
Market Based Approach : Understanding finance from the prism of financial markets will help sharpen the understanding. Corporate finance also should be linked with market based approach.
Financial Newspapers : Students should be encouraged to utilize ET, BS to understand real-time market happenings
Market Experts : Colleges can invite market experts and experienced professionals from brokerages, regulators and other market infrastructure institutions to share their experiences.
Standard Text Books : Text book selection is also important from my experience. For ex INVESTMENTS by Bodie, Kane, Marcus, Mohanty suits very well to Indian examples against say, Fischer and Jordan. Same is the case with Options by HULL & BASU. ( By the way I am looking forward to interacting with Mr . Basu at IFC 2011 at Bangalore IIM)
Empirical approach : Finance concepts can be operationalized using data from NSE, BSE websites . Use data to illustrate which will enhance the experience of students.
Charting Tools : There are free Technical analysis tools offered by NSE like TAME .These can be utilized to demonstrate Technical analysis real time.
Business Channels : Students should practice listening to Channels like CNBC, ET NOW, BLLOMBERG, NDTV PROFIT at least one hour daily. Well give known anlysts like Udayan Mukherjee, Lata Venkatesh give good insight into latest happenings.
Statistical orientation : lectures should preferably be less of personal opinion and more of statistics based approach.
NCMP : It is advisable for MBA( Finance) students should at least get a NCMP Level 1 certification before they finish their degree which willl differentiate them from others in the job market.

NSE Certified Market Professional Level 5

2011-12-02T14:55:00.001-08:00

NSE has introduced NCMP Level 5 under its NCFM umbrella.

It is awarded to candidates passing 11 + NCFM Modules.
4 New modules were added which are very interesting for a student of finance.
NCFM helps to standardize and bring the Indian context to finance body of knowledge.
As academics depend on US texts, quality Indian material is lacking particularly in the areas of market practices and design. NCFM materials will bring classsrooms to a common platform which I think is a positive externality(in economics jargon)
I would believe this has prompted NSE to launch tie-ups with universities for MBA( Financial Markets) and BBA ( Financial Markets) courses.
I would expect more NCFM modules in areas like Technical analysis, Advanced Derivatives, Financial Journalism,Statistics for Financial Markets which come to my mind straight away.

Attending Workshop at BDU, Trichy

2011-11-25T17:42:00.001-08:00

The participation in the workshop on " How to write a Research paper " is very enlightening for me.

I thoroughly enjoyed the experience though it is one way 18 hrs travel from Hyd - Trichy .
I particularly liked the Pongal at Egmore station and also at Trichy
When returning back, in Chennai central the Sambar Rice is Fantastic @ Saravana Bhavan
I wanted to network with researchers in Finance and I could meet very nice people.
My friends in this trip included Mr. Narayanan, Mr Prabhakaran and his two student colleagues.
The hospitality and the humility with which BDU- Department of commerce and financial studies function is truly an example to emulate.
I particularly liked Dr Roji George for his finance examples on Literature Review.
Hope to visit again on JAN 7-8,2012 for FIMIC 2012.

Markus Heitkoetter on Trading Education

2011-11-10T02:01:00.001-08:00

I take the liberty to publish Markus Heitkoetter's comments on Trading Education. He is a respected blogger and Trading Educator.

Learning to trade the forex market successfully is something that many aspiring traders fail to achieve. Many beginning forex traders erroneously drop thousands of dollars on forex educational products with the belief that the more expensive the product the more effective it will be. Thanks a lot...

Markus Heitkoetter further comments

Hi,

Sellers of trading education strongly advise traders to seek assistance of a professional commodity broker to provide them with valuable functions that best suit their needs. A commodity futures broker can ensure that all trades are placed correctly, avoiding any costly mistakes. Thanks a lot.

Training on Futures & Options

2011-10-24T05:51:00.000-07:00

BlackSwan intends to conduct a training program on F&O during NOV 5-7,2011 and repeat the same course on NOV 19-21,2011.

Signals from F&O by Devangshu Datta my favorite analyst here.
Measuring Volatility here.
Another good piece by Devangshu Datta.
Conquering Volatility
Article on F&O strategies as a template for analyzing market movement.

Infact, a collection of his articles in Smart Investor of Business Standard every Tuesday will make one a well informed trader or investor in Derivatives.

First Day of IPO Listing: Wild & Spurious Volatility

2011-10-19T02:10:00.000-07:00

IPO Listing day fluctuations are abnormal. As CNBC anchors term it there are lot of fun and games in these counters as there are no price bands on listing day.

Financial Express on Listing Day Volatility
Report on IPO listing day volatility in Business Standard
Prithvi Haldea of Prime database on Listing Day price bands.
SEBI's earlier proposal of 25% price band on first day of IPO Listing.
DNA on the Violence of Volatility of New Listings. One has to participate to experience the abrupt price fluctuations.
Will pre-opening trade help in case of IPOs Listing day fluctuations ?
IPO manipulation behind these violent moves ? Sucheta Dalal here
Research article on IPO pricing
Scholarly article on IPO pricing. Infact the vast amount of availability of academic literature makes the study of financial markets endlessly fascinating and intellectually satisfying. A motivated student of financial markets can grasp all aspects of an issue from various sources and form an informed opinion.
Another article by SSS Kumar who is an alumni of SVUSBM and a student of Dr M S REDDY who is my professor at Tirupati.
Information assymetry in IPO pricing may necessitate not applying price bands on Day 1.
Today( Oct 23,2011)'s new listing VASWANI has allegations of dummy IPO subscription.
Related Article on Vaswani
Always fascinating prose by Dr Ajay Shah on IPOs. He reminds me of Larry Harris of Trading & Exchanges. His articles on Indian Finance together with Dr Susan Thomas of IGIDR will be a GITA on Indian Finance & Markets. Infact Dr Susan Thomas web page contains lot of notes on Econometrics and Finance which is a feast for students of Finance and Financial econometrics.
Another respected thinker on Indian Finance even quoted in India's Financial Markets Book.
MoneyLife on IPO manipulation

Must Read Finance Authors

2011-10-18T08:27:00.000-07:00

During my approx 20 years of fascination for the subject of Finance & Markets , I came across many fantastic authors which I will try to recollect here.

Bodie, Kane, Marcus on Investments
Luenberger with Investment Science
Paul Willmott on Derivatives & Quantitative Finance
Aswath Damodaran on Investment Valuation
Larry Harris on Trading & Exchanges
Victor Niederhoffer on SPECULATION
Brett Steenbarger on Trading Psychology
N N Taleb on Hedging & Randomness
Anderson & Sweeney on Statistics
Fabozzi on Fixed Income
Ajay Shah & Susan Thomas on India's Financial Markets
Chris Brooks on Financial Econometrics
Hull on Options & Futures
Elton & Gruber on Portfolio Theory
Fuller & Farrel on Investments
FX Diebold on Forecasting
Snedcor on Statistical Methods
J R Verma on Derivatives & Risk Management
Mark Hirschey on Investments - More on the Behavorial aspect.

BlackBox Sellers of Trading Education

2011-10-16T04:45:00.000-07:00

Today I have attended a Seminar ( rather a sales pitch !) by a person in Hyderabad who wants to sell his 3-Day workshop and Trading Software.

The company's 3-Day workshop is priced at approx Rs 40000/-.
All techniques of influencing the audience were used by the Trading system seller. Like anchoring the seminar benefits to Rs 200000/- worth.
I personally could not identify with the speaker's motivational seminar with rather using flowery analogies, exaggerated claims, quoting outliers as if they are normal!
You can check the company's website here
I would rather refer all my friends to Dr Brett at www.traderfeed.blogspot.com
You have a life time of learning resources here by Dr Brett
I take the liberty to recommend you the book TRADING & EXCHANGES by Larry Harris for Rs 400 at 1 % of the company's workshop.

VOLATILITY

2011-09-24T23:25:00.000-07:00

Volatility or Vol as Market participants call it affectionately is the soul of Financial Markets. Recently I came across lot of resources on Volatility as my research also involves survey on Volatility.

Nobel Laureate Robert F Engle on VOLATILITY. His FT Lectures here.
R F Engle's take on Financial Market Volatility on Youtube.
Interview with Engle by FX Diebold.
In fact I am greatly influenced by Dr K Kiran Kumar of NISM for introducing me and being a teacher of Financial Econometrics at NISM in his EERF Summer Schools. Engle has actually participated in a conference at NISM two years back.
One book that is extremely lucid in explaining financial econometrics is Chris Brooks.

NEWTON LINCHEN ON INDEPENDENT TRADER

2011-09-01T21:57:00.001-07:00

Dear Professor,

Namastê!

It has been occurring some improvements to this issue: I only day trade now patterns I had worked with comprehensive statistics.

This means a lot in terms of reducing overtrading and the emotional factor of trading.

Notice that when you analyse trade by trade, you're "right" or "wrong", depending whether the trade works out or not. That kills traders, for we misinterpret random events with a "failure" of our judgment skills... When you only trade with statistical setups, you don't feel bad anymore about losing trades (you're acquainted now with the histogram of the distribution of the series of trades - losses and gains), and you also don't feel exhilarated when the trade is a win, because, remember, it was not the fruit of your recent workout in analysis or judgment. It was the result of the distribution of the series of trades, according to the statistical pattern.

In other terms, when the statistical trades works well, it's just normal. When it produces a loss, it's not your fault.

: )

Interesting Readings

2011-08-05T07:10:00.000-07:00

I found the following to be of interest to Traders and students of Markets.

How to become a professional Trader
Developing a daily game plan
Scholarly article on Market Quality . I remain fascinated with Market Microstructure - the study of internal workings of the market.

25 Hours Trading Course @ BlackSwan

2011-07-10T06:06:00.000-07:00

BlackSwan has scheduled a 3-Day, 25 Hrs Trading Course during August 13-15, 2011.

The details of the Course is given here.
This is a full time course from 9.30 am - 5.30 pm. Includes Tea, Snacks & Lunch
It covers Technical Analysis & Derivative Strategies.
The inspiration is from SMB Training, Dr Brett, Afraid to Trade.

Concepts of Finance

2011-07-07T04:22:00.000-07:00

I was reading or rather forced to read Concepts of Physics by H C VERMA by my daughter Gangineni Hita studying 8th Class at Sri Chaitanya Techno Schools. Her aim is to get into the prestigious IITs through their JEE Exam.

I wonder whether a distilled concepts of Modern Finance as articulated by Susan Thomas, JR Verma is needed for B-Schools.
Modern Finance is predicated on lot of Concepts like No-Arbitrage Pricing, EMH, Time Value of Money etc.
Excellent article by J R Verma on Teaching of Finance
Dr Susan Thomas Opines on Modern Finance
Essential reading on New Facts of Finance
One of my most liked book for concepts of markets and Trading is by Larry Harris. Even Victor recommends it as an outstanding must read.

The Independent Trader

2011-07-06T20:37:00.000-07:00

Trading the markets is one of the most challenging endeavors. This is a field where only the best can survive unlike other professions where average can also make a reasonable livelihood.

SMB Training elaborates on the daily life of an Independent Trader.
Some psychological aspects of Trading
Difference between professional and amateur traders by Dr Brett
How to become an independent stock trader
One of the most tough tasks in becoming a profitable day trader is overcoming Transaction Costs.

NISM - EERF as a Platform for Finance Researchers

2011-07-03T05:51:00.000-07:00

I had a very good experience at NISM attending the yearly EERF 2011 workshop.

I have no hesitation in recommending any researcher,teacher of finance, Market practitioner, Scholarly investor, Corporate executives in financial markets research and practice to attend it at least once. I have attended twice and thoroughly enjoyed it.
I think only comparable programe is by Susan Thomas at IGIDR namely Statistics for Financial Practitioners. But I am not sure of its frequency and accessibility.
EERF can act as a very good platform for budding researchers in Finance. I came to know many researchers in this area through this venue.
I highly appreciate an almost encyclopediac view of financial markets related research by Dr K Kiran Kumar of NISM ( ex- ISB, IISC)

MBA/BBA in Financial Markets

2011-07-02T23:04:00.000-07:00

A welcome trend is developing in Financial Markets Education. Super specialization and focused curriculum,industry tie-ups are becoming important for good business education.

NSE has tied up with Punjabi University, MDU for BBA/ MBA in Financial Markets.
BSE Training Institute is offering MBA- Financial Markets in association with IGNOU
FTKMC an associate of MCX is also offering PGD in Financial Markets Practice
DMC institute of Capital Markets is also in the process of starting MBA & BBA in Financial Markets
ITM institute of financial Markets has a PGDM - Financial Markets course
NISM has a well regarded 1-Yr course called PGPSM
BLB Institute of Financial Markets has MBA/BBA in Financial Markets in association with MS University
Business India Institute of Finance has a 1-Yr course in Financial Markets
IFMR has a highly reputed PGDM- Financial Engineering
NMIMS has an MBA in capital markets program in association with BSE

This is only a partial list. Financial Market education is on the rise on the back of NSE's Ravi Narain's comments.

Some project Ideas for MBA Finance students

2011-07-01T23:34:00.001-07:00

I would like to list out some ideas for Project work and also empirical study. Pl note that these are are borrowed extensively from the existing financial markets literature.

Stock Index Futures Market in India
Single Stock Futures Market in India
Index Options Markets in India
Stock Options Market in India
Commodity Futures Market in India
Risk Management at NSE
Risk Management Using Derivatives at NSE
Study of Selected Mutual Fund Schemes in India
Study of selected ULIP schemes in India
Technical analysis- A study of selected Indicators
Study on On-line Trading, Clearing & Settlement
Comparitive analysis of internet trading schemes of Selected Stockbroking firms in Hyderabad
Sub-Brokers at NSE : A study in Hyderabad
Currency Futures Market in India
Currency Options Market in India
Study on Commodity Exchanges in India
Study of Indian Capital Markets at NSE
Study on Regulation of Indian Securities Market - Case study of SEBI
Indian Stock Market Volatility - A Study
FII impact on Indian Stock Market
A Study on Exchage Traded Funds ( ETFs)
Fundamental analysis of different Companies
Beta analysis of selected Nifty stocks
Study on IPOs at NSE
Dividend analysis of Selected Companies
Study of Single Index Market Model on selected Nifty Stocks
India VIX- A study on Volatility Index
Study on PMS Schemes in India
Portfolio Construction & Management
Study on selected M&A's in India
Study of Market Efficiency in India
Indian Stock Market Integration with Selected Countries
Study on Investor Behavior in Hyderabad

MARKET QUALITY

2011-06-26T21:23:00.000-07:00

My research topic revolves around assesing the impact of Microstructure innovations on Market quality at NSE.

I am proposing to examine the issue from three stand points
Market quality in terms of a) Informational Efficiency b) Market Volatility c) Market Integration
I want to examine how various metrics can be used as proxy for these measures.
Presently I am doing a survey of literature.

Basic Skills for MBA ( Finance) students

2011-06-25T22:31:00.000-07:00

I hope that many students doing project work for their MBA ( Finance) brush up on their following skills.

How to type in MS-Word, Using MS-Excel for simple tasks of forming a table etc
Browsing for required information on google and othe search engines.
Getting required data from websites like http://www.nseindia.com,www.bseindia.com,www.sebi.gov.in/ and othe sites mentioned in a previous post.
Basic report writing skills.

My role models in Indian Academic Finance

2011-06-24T20:23:00.000-07:00

I would like to share my role models in Academic Finance. Of course this cant be an exhaustive list. I tried to put whom ever I came across or read personally or through their writings.

Ajay Shah definitely one of the top most thinkers in finance, economics and policy. His book on India's Financial Markets is a must read for any body remotely connected with Indian Finance.The book is full of empirical justifications rather than empty opinion.
Susan Thomas . I admire for her clarity and depth in econometric treatment of financial markets. She has lot of top quality finance materials online for free download.
J R Verma . Famous for Derivatives. I have used his book on DERIVATIVES & RISK MANAGEMENT for my class at VJIM.
Kotha Kiran Kumar of NISM. I have attended two summer schools on EERF just to listen to his interpretation of Market Microstructure research and his unique way of analysing research papers. He shows you how to connect econometrics with finance.
Prasanna Chandra . I have heard his lectures at my initial days at ICFAI.
NJ Yasaswy for pioneering the the financial education revolution in India through ICFAI.
SSS Kumar who is an alumni of SVUSBM whre I have also studied.
M S Reddy has made initial impression on me at my SV University MBA days for his way of questioning.

SOURCES OF FINANCIAL INFORMATION

2011-06-04T05:50:00.000-07:00

Much of the information required by MBA students for their project work can be found on the web.Some of the frequently used sources are

Government Owned websites : Securities and Exchange Board of India (SEBI) http://www.sebi.gov.in/
Reserve Bank Of India http://www.rbi.org/
Ministry Of Finance http://www.finmin.nic.in/
Stock Exchange Websites : National Stock Exchange ( NSE) http://www.nseindia.com/
Bombay Stock Exchange http://www.bseindia.com/
Multi Commodity Exchange http://www.mcxindia.com/
Financial Magazine / Newspaper websites: Business Standard http://www.businessstandard.co.in/
Hindu Business Line http://www.thehindubusinessline.com/
Financial Express http://www.financialexpress.com/
Wall street Journal http://www.india.wsj.com/
Financial Times http://www.ft.com/
Economic Times http://www.economictimes.indiatimes.com/
Mint http://www.livemint.com/
Business Today http://www.businesstoday.intoday.in/
Business India http://www.businessindiagroup.com/
Economist http://www.economist.com/
Capitalmarket http://www.capitalmarket.com/
Indiainfoline http://www.indiainfoline.com/
Equitymaster http://www.equitymaster.com/
CRISIL http://www.crisil.com/
Moneycontrol http://www.moneycontrol.com/
CARE http://www.careratings.com/
Myiris http://www.myiris.com/
Bloomberg http://www.bloomberg.com/
Reuters http://www.reuters.com/

What PRICE should we use?

2011-05-08T19:13:00.000-07:00

There are four prices observed in the market. Financial press reports OPEN,HIGH,LOW,CLOSE.

1. There is a difference between Closing Price and Last Traded Price(LTP). NSE provides Closing price as last half an hour VWAP(Volume Weighted Average Price).

2.If Corporate actions(Bonus,Stock Split,Rights) happen how to adjust the price so that when we caluculate returns it does not give a wrong picture ?

3. CMIE-PROWESS gives ACP( Adjusted Closing Price). Yahoo Finance also gives Adj Close data.

Essential Econometrics for Research in Finance @ NISM

2011-04-30T06:54:00.000-07:00

I had the pleasure to attend EERF 2011 @ NISM, Mumbai.

The program is from Apr 30 - May 10,2011
I have met many interesting people from academics including Mr D N RAO ( who has published widely on Mutual Funds), Dr Pandikumar ( PSGIM) .
On Day 1, interesting class sessions & discussion on Financial Data by Dr Kiran Kumar ( earlier with ISB) though afternoon session is a bit lacking in Financial examples .
Road map of Econometric tools and Statistical Thinking by Dr K K on Day 1.
Most of the examples relate to Financial Markets and Market Efficiency and Microstructure. I hope to get some inspiration for my PhD Thesis.

MBA Finance Projects @ BlackSwan

2011-04-20T03:19:00.000-07:00

I have the pleasure to interact with MBA Finance students advising on their Projects.

Most of the projects deal with Indian Financial Markets, Risk Management at NSE, Performance Evaluation Of MF Schemes,Fundamental Analysis of Companies, Study of Commodities Markets,Risk Management using Derivatives,Study of F&O Market in India etc.
Indian market data is freely available at http://www.nseindia.com,www.bseindia.com,www.mcxindia.com/ and individual MF websites and Company websites for financial data/ Annual Reports.
Even though the project study appears simple at conceptual stage, there are lot of details at the implementation level. For ex when trying to do a study on " Performance evaluation of MF Schemes" we have come across the following issues.
Which Bench mark to consider ? NIFTY/ BSE 200/ CNX 100
NAV frequency ? Daily/ Weekly/ Monthly
What is the Risk free Return ? RBI rate/ SBI term deposit rate
Various MF data sources are available. For eg http://www.amfiindia.com,www.%20mutualfundsindia.com,value/ research, CRISIL, http://www.mf.economictimes.com/, SEBI, Business world and Business Standard sites.
For Capital Market related projects ISMR 2009, NSE Fact Book, Risk Management guidelines are very useful.
Some common enquiries students can undertake is regarding examination of Return and Risk of selected instruments ( Equity Futures, Commodity Futures) and compare them on the basis of Volatility.
One fruitful study is adequate characterisation of Risk Containment Measures by exchanges ( NSE) in terms of Margins, Capital adequacy norms and their detailed calculation.

Trading and Poker

2011-03-30T00:42:00.000-07:00

There had been lot of articles about comparing Trading with poker.

Dr Brett on TRADING & POKER

2. Intersting discussion at DailySpec

3. The Chair's Admonition.

4. Sushil Kedia on Bluffing

5. More articles at DailySpec

INTERESTING READINGS

2011-03-16T00:59:00.000-07:00

Interesting Readings

1. Article on Day Trading here

2.The rise of college traders here

Teaching Trading

2011-02-27T21:36:00.000-08:00

As the financial markets become more accessible and democratised the need for Trading Education grows.

In my own way I have conducted around 15 programs in the past one year. They are basically 2-day workshops focussing on necessary trading skills, TA tools, psychology and risk management.
Around 200 participants were covered by our courses.
An intersting article on Teaching Trading at Universities.

Discussion with Option Pundit

2010-12-31T23:52:00.000-08:00

I had a surprising and interesting conversation with the founder of OPTION PUNDIT. It was pleasnt conversing with him and sharing various ideas about Indian market peculiarities in terms of options market.

His unique take on Indian Market.

What we can learn from FUTURES & OPTIONS Program

2010-12-31T23:22:00.000-08:00

FOME workshop scheduled on JAN 8 - 9 , 2011 has the following objectives

Learning about Option Pricing Models ( BSOPM)
Compare the risk profiles of Option Trades
Estimate the probability statements made by a volatility figure
Discuss how changes in different variables will affect the Value of calls & puts
Principles of volatility trading and how this type of trading can be profitable
Identify ways to make money trading with a long and a short Gamma position
Caluculate the Historical Volatility and evaluate the resulting Data
Describe Skewness and Kurtosis
How Skewness & Kurtosis affect the prices of OTM Option
Understand the basic Option position payoff profiles
Risk Sensitivity mubers - Greeks
Trading in the real world - putting it all together to derive our forecast volatility
Trade structure that benefit from rising or falling IV
Trade Structures that benefit from Time Decay acceleration
Trade Structures that benefit from Rapid price Spikes
Price distortions during the final days of an expiration Cycle
Predicting and exploiting expiration day strike price pinning
Expiration day Volatility Collapse and dynamic position management

Trading Floors at Colleges

2010-12-30T22:31:00.000-08:00

For MBA students specialising in Finance and Investments integrating Classroom and Trading Room is important.

Where Homework Is Managing a $200,000 Stock Portfolio
Many B-Schools are also adopting this idea to show case and bring students to speak industry jargon.
Dr Brett on Financial Engineering program
I had similar experience at ICFAI School of Financial Studies in running a Trading floor with SPIDER IRIS Software and othe real time facilities.
Dr KGR at VJIM had contemplated these facilities long back.

Student Empirical Research in FINANCE

2010-12-29T03:18:00.000-08:00

I had chanced upon this article on the experiences in " STUDENT EMPIRICAL RESEARCH "

Lot of interesting findings useful for B-Schools / MBA institutes.
I think this is a welcome trend in Business education as being implemented in Great Lakes , VJIM , ISB etc.
The skills required of Post Graduates as commneted upon by Dr Ajay Shah
Interesting discussion on the increasing relevance of FRM

OPTIONS & VOLATILITY Resources

2010-12-24T23:58:00.000-08:00

Some of the options & volatility resources that are of interest to traders and students are listed below.

NEW & Refined FUTURES & OPTIONS Training JAN 8 - 9 , 2011

2010-12-24T22:17:00.000-08:00

Futures & Options Made Easy (FOME 2011) is improved & refined in 2011 with lot of new additions very useful for students, traders and any one interested in the Derivatives Markets.

Option analysis software is being provided free .
Complete analysis of 22 option strategies of NSE OTS Module.
Lot of Examples are added to the course presentation
Complete market microstructure and market design is integrated.
Special topics on VOLATILITY and Statistical Concepts.
Real world trading approach and demonstration of trading and analysis software tools .
Sessions on Trading psychology & riskmanagement

INTERESTING READINGS

2010-12-15T21:42:00.000-08:00

Some of the posts I found may be of interest to the readers.

How to trade with the STOCHASTICS.
Newton Linchen has a very interesting Trading & Investment Library
From the God of Trading Psychology
JR Verma on Financial History books. His Derivatives & Risk Management is a my favorite for Indian perspective. I think everyone interested in Financial History should read william Goetzman.

Can I be 100% sure of Making Money?

2010-12-15T02:31:00.000-08:00

In response to my many advertisements in the print media, canvassing for participants in my three trading & Investment education workshops , I often face many intriguing questions.

Three core educational workshops were being focussed by me namely

a) TECHNICAL ANALYSIS MADE EASY ( TAME),
b) FUTURES & OPTIONS MADE EASY ( FOME)
c) FUNDAMENTAL ANALYSIS MADE EASY ( FAME)

    2. Often participants ask" is there a 100% guranteed way to make money ". I am left speechless for a moment as I have no short answer.

    3. Here I try quote from professional traders in trying to answer the above question.
    4. “Contrary to popular belief, trading is a craft. Like an artisan who develops a craft over a lifetime, it requires a discipline to be exercised daily.” Mike Bellafiore

    5.   What’s going to happen? Who knows. As a trader, you’re not supposed to know the absolute future   to be able to profit from it.
You study the chart, assess the structure, define the probabilities, and then if you feel an opportunity presents itself, position into the price action that triggers an entry (or exit in the case of a stop-loss).

                                   - COREY ROSENBLOOM

6,"There is nothing to 'get' as a trader. What works one month may not the next. Trading set ups you crush one year may be extinct the next. As prop traders our job is to recognize present patterns and exploit them. But we also must have the humility to accept that these patterns might change at any moment. And when they do we must find new patterns. We must adapt."

                              - Mike Bellafoire

I can quote from any number of respected industry voices, but the beginning or developing trader needs to realize and internalize that" there is no holy grail in trading to be discovered"

Stocks in Play

2010-12-14T19:33:00.000-08:00

Stocks that may be on traders' radar today

1. FINANCE TECH : The stock appears to have rebounded stronly yesterday. My inductive leap of understanding in this might have to do with SEBI Chairman replacement / hopes of MCX-SX revival ?

Understanding TREND !

2010-12-14T01:08:00.000-08:00

One of the major dilemmas faced by the traders is regarding Trend. Here let us try to understand it by standing on the shoulders of Giants in the field of financial Markets.

Interesting readings on Momentum. The large amount of research freely available on the web provides a solid foundation for the motivated market participant.
How to draw a Trend Line. Many of the details in TA is important and nuances in TA should be considered.
Jim Sogi on Trends
Phil a DailySpec author on Trends
Trend following by Rocky Humbert
Trend spotting from Kensmith
The classic by chairman of DailySpec and the chief speculator on Negative feedback
Range and Trend by Bill Rafter

Everyone can Learn & Use Technical Analysis

2010-12-13T20:49:00.000-08:00

TA remained a secret to me for many years due to lack of access to proper resources and orientation. Now one of my aims in this blog is to share and open the TA approach to as many market participants as possible.

As a DailySpec member , I have my own reservations about naive TA and stubborn adherence to rigid rules.
But if approached in the way of concepts, TA can be a powerful tool in the arsenal of a disciplined trader.
Another advantage in understanding TA is to be aware of the Media Jargon in interpreting market movement.
If one has basic concepts of TA, I found following many analysts in the media like Ashwani Gujral, Sudershan Sukhani, Rajat Bose, Devangshu Datta,Atul Suri enriches our foundation and really adds to building our edge in the market.
I believe the first step in becoming an independent analyst , is to understand what other commentators are saying and can we reconstruct their arguments independently ?
What I implent in my Futures & Options training program is to decode many of Devangshu Datta's Derivatives articles in Business Standard .

Essential Package for MBA ( Finance) students & Fresh Graduates

2010-12-09T21:14:00.000-08:00

BlackSwan Financial Marlets School is launching an essential package for MBA Students of JNTU/OU.
This package is planned as three parts which will give solid understanding of Equity markets, Practical exposure to Trading & Exchanges, Corporate perspective on relationship management in Financial services industry.

One-Week Crash Course ( Dec27- 31,2010) full time ( 10am - 4 pm) on the subjects SECURITY ANALYSIS & PORTFOLIO MANAGEMENT , DERIVATIVES.
NCFM - Capital Market Dealers Module & Derivatives Market Dealers Module Training
Live project with Share Broker ( Member of NSE)

Feedback from a Participant

2010-12-09T20:33:00.000-08:00

I am happy to post a pleasant feedback from a participant in Futures & Options Training program.

"Hi Mr Dhananjay,

I am Alnoor Parbatani , i ve attended ur workshop on future and option strategies last week , which gave me good insights on market and its behaviour .

Now i am comfortable in understanding of option strategy and after reading and understanding of material u given to me , i tried my first hands on attempting the ncfm option paper mock test werein i was able to score 75% in my first attempt out of 90% . i thank u for ur valuable traing and input .

reagrds

Alnoor "

9533252765

Technical Analysis training Program

2010-12-04T01:33:00.000-08:00

As I am preparing for the 2-Day workshop on DEC 18- 19, it gives me an opportunity to look afresh at my TA Concepts, tools, actionable strategies.

Understanding Trend is the most basic. Often beginners questions revolve round Trend determination.One good post on this by Tucker report.
What Indicators trader should use and the steps to follow in looking at a price chart ? 20EMA,50 EMA, 200 SMA and Bollinger Band ( 20,2,0) together with MACD (3,10,0) is the preferred approach of Corey Rosenbloom.
Reasoning in terms of Key levels to watch, idenfying any confluence in all these price levels, developing an IF / THEN logic will build a solid foundation for the trader.
Using multiple timeframes in our analysis. Studying daily chart, weekly chart in conjunction or reading both 15-min and 30-min Intraday chart.
Having tools to detect TREND CHANGE
Trying to answer the frequent question of best time frame to Trade
Interesting post on the relevance of Trading Education.
I will be emphasising on the various free tools available to the Indian retail trader in his quest for trading success.
This 2-Day ful time program will help investors and traders take independent decisions, make sense of the randomness of markets, decode the jargon of financial media anr recommendations/ tips from brokers and consultants.

Reflections on F&O Training Program

2010-12-02T02:47:00.000-08:00

We have succesfully completed F&O Training program during Nov 28 - 29. Some of my learnings from this workshop

The group of 14 participants are very involved. Experienced traders from brokerages, Technical analyst also attended.
Innovations in the program included walking through many Derivatives articles by Devangshu Datta in Business Standard, Using Options caluculator in NOW Software.
As a team we are able to crack the Option Greeks.
Our course pack is compiled from NCFM modules on Derivatives Market dealers module, Option Trading strategies Module, Derivatives & Riskmanagement by J R Verma and Options Trading by Jeff Augen.
Need for actionable techniques and immediately useful trading ideas were stressed by some of the participants.

FUTURES & OPTIONS MADE EASY ( FOME)

2010-11-12T02:34:00.000-08:00

FOME , a Derivatives workshop is being conducted on NOV 27-28,2010 at BLACKSWAN Financial Markets School.

The twin objectives of this workshop are

     a) To understand the Derivatives Instruments- Futures & Options as they are traded at NSE
      b) To be able to succesfully clear NCFM - Derivatives Dealers Module ,    NCFM - Option Trading Strategies Module

2. The following topics are covered in the course

             a) Introduction to Derivatives
             b) Reading the Derivatives page
             c) Market Index
             d) Introduction to Futures & Options
             e) Application of Futures & Options
             f) Option Strategies - 22 types of strategies given in NCFM - Option trading strategies module
            g)Option Pricing
           h) Greeks - Delta, Gamma, Vega, Theta, Rho
           i) Volatility
           j) Trading the Earnings & Expiration Cycle

3. Practical analysis of Open Interest, Put-Call Ratio, Implied Volatility data
     is discussed

Useful Web resources for Independent Traders

2010-10-12T19:22:00.000-07:00

Huge data and info is available on the net for a motivated independent trader. Some websites provide excellent tools at reasonable price. I think this is leading to huge participation and democratisation of financial markets. Some would argue it is leading to huge volumes aiding price discovery.

NSE offers excellent data and visualization facility by way of NSE MARKETTRACKER
ICharts has a screener and stock lists and stock Glance facility which is also appreciated by active trader community. I believe it comes at a nominal charge.
One of the dilemmas faced by an independent, active ,discretionary trader is in stock selection. As emphasised by SMB Capital being in SIP ( Stocks in Play) is most important for active traders.

Thinking about Volatility

2010-10-10T04:53:00.000-07:00

Volatility is a bit less understood and researched by retail market participants compared to directional bets.

There is lot of disdain about academic work on markets in the arena of practicing traders. This gap needs to be bridged as there is plenty of fine academic work on market behavior and the traders edge can be derived from that.
My reading of Victor Niederhoffer, Brett Steenbarger's works have made me appreciate the scientific and quantitative aspect of markets.
I had the pleasure of attending NISM workshop and listening to the fine lectures of Kotha Kiran Kumar on Volatility and Market Microstructure.
Fine Understanding about Volatility here from none other than Robert Engle.
Volatility is least understood because it is not directly observable unlike price movement.

Understanding Price Structure

2010-10-10T04:34:00.000-07:00

The basic intention in the TA training course @ BlackSwan is to make investors & Traders understand the technical jargon. Concepts of TA are very important than simplistic technical rules or tips.

Often media and analysts proclaim about the structure of a market or Instrument. Corey Rosenbloom lucidly explains about PRICE STRUCTURE.
After reading and following Corey Rosenbloom, I got to respect TA and the importance of understanding deeply its concepts.
Stockbee on concepts of TA.
I am happy to see a fellow SpecLister and highly respected Analyst SUSHIL KEDIA launching a TA forum for Indian Traders. I would love to be part of this initiative. Sushil regularly contributes to DailySpec and I liked his articles.

What is BlackSwan Financial Markets School ?

2010-10-10T03:30:00.000-07:00

BlackSwan Financial Markets School had succesfully completed a two day Technical Analysis workshop during Oct 2-3.

Nine participants from diverse backgrounds and age groups attended the workshop.
The group expressed tremendous satisfaction on the way it is organised and presented. one medical doctor, ex-CEO, an Entrepreneur, an IT professional on a sabbatical from UK, a professional Day trader, A beginning Trader, Investor are part of this group.
We shared ideas, exchanged notes and both the teacher and taught are richer for the experience.

TECHNICAL ANALYSIS MADE EASY ( TAME) 2010

2010-09-11T19:59:00.000-07:00

BlackSwan Financial Markets School is offering intensive,detailed, practical training program in Technical Analysis from Oct 2-3,2010 at Hyderabad.

The program curriculum is exhaustive, well-structured.
Having seen many TA programs lacking the context and becoming mere powerpoint presentations, BlackSwan aims to concentrate on CONCEPT-ORIENTED TA.
Dr Brett on Introduction to TRADING
TA is but one piece of Learning how to trade.
Creating a learning culture for your trading effort.Trading is a mindset and a way of thinking, it is more than entry, exit, stop loss and target.
New and developing traders need to have a holistic understanding of market environment and context.
Inspiration for this training efforts derived from Dr Brett's thinking.
Sharing curriculum of the Trading program is important to asses the quality of the program.

STOCKMARKET APTITUDE TEST ( SMAT) 2010

2010-09-10T23:21:00.000-07:00

BlackSwan is proposing to conduct SMAT 2010 a stockmarket aptitude test for all learners interested in Trading & Exchanges.

Possible partners for this initiative are Stockbrokers, Exchanges, B-Schools, Media partners like economic news papers and business channels, trading software providers etc.
The possible dates for the launch is Nov 2010.
The participants will be awarded discounts ranging from 25-100% on a 3- month NCMP Level 4 course.
SMAT can be benchmarked to industry needs (for ex StockBroking and financial services employee requirements)

Transaction Costs in Trading

2010-09-04T23:38:00.000-07:00

Active trading involves huge transaction costs. In my experience as an intraday trader and running a trading office predominantly consisting of short term traders

Huge amount of energy is expended in the form of Transaction Costs, Taxes
Some of the items in the Broker's charges that need clarity is the Stamp Duty in case of Brokers having regd office at Hyderabad.
Turnover Charges being charged in excess of NSE Charges from clients ?
Victor on the effect of VIG

How to generate Trading Ideas

2010-09-02T21:02:00.000-07:00

One of the best practices I am trying to implement in my short term trading approach since entering into professional trading of stockmarket is STOCK SELECTION.

Trading only active stocks with volume and volatility, Identifying stocks in play, Stocks with Breaking News, Top Gainers/ Losers .
Brett Steenbarger on Identifying Trading Themes.
Personally I would zero-in on Stocks with huge CNBC coverage, print media exposure as contrarian plays trying to fade extreme optimism / pessimism on the stock.
Opening reversals identified work faster with less heat for the Intraday Trader.

Useful resources on DERIVATIVES

2010-08-28T22:57:00.000-07:00

Web provides top class resources on financial markets,trading and exchanges.

Derivatives FAQs by Ajay Shah, an original thinker in Financial Economics. Although the document is

a bit dated, his prose reminds me of the style of Larry Harris in Trading & Exchanges

2. Another original piece by Dr Ajay Shah

Interesting Readings

2010-08-25T20:57:00.000-07:00

Stop Loss is a commonly discussed topic in Trading Rooms. Disagreement over the use of stops is common among experienced traders.

Scholarly opinion on Stops at DailySpec
Modern Classics of Trading here

World Class education on Trading - for Free

2010-08-22T03:58:00.000-07:00

For a motivated student of markets , Web offers a feast of trading education resources.

Understanding Technical Analysis to the core from Corey Rosenbloom.
Concepts and techniques of Intraday Trading by SMB Capital
You have to drink and eat every post of the God of Trading Psychology.
Scholarly education for a speculator from the Giant in the field of Speculation.
Plenty of trading ideas and model templates from Stocktwits

Are you a Day Trader?

2010-08-22T03:48:00.000-07:00

One of the common points of discussion among traders is about their timeframe. Day trading, Swing trading or position trading or scalping ?

Many traders defend and elucidate the advantages of their timeframe ( for ex Intraday).
The point is I am a trader. Depending on the opportunity presented by the market I am flexible with the time frame.
Drakoln of Speculator Academy opines on this here.
Tucker Report has thoughts on Day Trading and opportunities in Very short or very long time frames.
Trader Mike has an interesting take on Day Trading.
A scholarly day trading approach by DailySpec Lister .
Every trader has a niche. He has to practice and perfect it.
Trading intution can only be gained by years of Screen time.

Where will the market go today?

2010-08-20T21:22:00.000-07:00

This is a common query by market participants. I have a different opinion on this.

As an intra-day trader I dont like to have a fixed opinion on the market direction.
The moment I express my directional opinion if any I am locked into this opinion and finding it difficult to trade.
Each instrument you trade has a different market. Many participants may not recognise this. They may not necessarily follow the broad market direction.
Though this may appear simple , clarity in basics will be of utmost importance.
The amount of information already reflected in the stock price and the trader's evaluation of this relative opinion ( ex : Crompton Greaves reaction to Avantha Power IPO, Sesagoa's inclusion in NIFTY, KVB's reaction to Rakesh Jhunjhunwala's announcements )

INTRADAY FUNDAMENTALS

2010-08-08T20:06:00.000-07:00

Intra-Day Trading requires lot of attention to detail and a science in itself.

I have been inspired by several concepts from SMB Trading Blog like Stocks in Play, Second day plays, Earnings play.
Combining Intraday fundamentals with technicals.
Traders' intution as a result of years of screen time ( 10 yrs min according to Outliers by Malcom Gladwell),ability to process breaking news ( witnesses in TCS - Friday) will result in good trades.
Identification of Niche of the trader is important since it tells us where the escape routes exist.

Designing Risk

2010-07-29T01:23:00.000-07:00

Financial markets allow you to design your own risk. Market is a vast pool of risk - return matrix. Investors can manufacture their own risk according to

The timeframes ( IntraDay, Swing, Positional, Long Term, Short term)
Selection of Instruments ( Stocks, Futures and Options)
Position Size ( small or large)
Type of strategies ( Long or Short or Pairs trading )
Diversification ( Across stocks, industries, asset classes like commodities and currencies)
Liquidity preferences

Stocks in Play 19th June 2010

2010-07-18T19:56:00.000-07:00

As an intraday trader I want to be in stocks with volume and volatility. Trading gurus often emphasise stock selection. Some of my random observations are

Asian Markets not picking up weakness displayed in US. US futures mildly positive.
EVERONN : This is a stock in play. Board meeting today. Reports of stake buy by Nikhil Gandhi

        stock up 18% in 2 days. Everonn Business education a rehash of
       ICFAI NationalCollege ?    Everonn trades violently ahead of earnings as witnessed last  time    . I would like to choose my spots and reduce size and honor stops and try to avoid revenge and aggressive trading in the scrip. Previous Day High of 613 may be good resistance but beware of false breakouts. Stock is only in Cash segment that adds to lack of flexibility to express negative view. I would have to allow the market to show that it has made a top.

3. Other stocks likely to be in play : TCS, Cromgreaves, HDFC Bank, Sesagoa, CanBank, DCB, Escorts, PFC, Mindtree, Zylog Systems on Results meetings and as active securities for the previous day.

Concepts of Trading

2010-06-30T03:53:00.000-07:00

I have started my learning in markets the hard way paying huge tution fees to the market and Vig to the brokers. Starting with fundamentals and by necessity learning by trial and error in brokerage trading rooms reminding of Reminiscences of a Stockoperator 's description way back in 1997.

As my journey continued with rich information contained in web 2.0 , I am fortunate to discover giants in the field of speculation, trading psychology and derivatives including Victor, Brett, Taleb.
Where as the beginning trader starts with Technical analysis and Charts , solid foundation may be possible only with CONCEPTS of TRADING.
TA when understood in terms of concepts like Trend, Momemtum, mean reversion, Low risk entry, classification of tools for ranging and trending markets,Day Structure assesment,Execution in countertrend,Allowing the market to show top or bottom formation, Sticking to timeframe,and understanding the Technical indicator built up rather than mechanical rules will put the developing trader in a formidable position.
I find much appreciation for the way the material of NSE Technical Analysis program is prepared in the lines of emphasing the concepts of Trading. The flow of the content in TA is very smooth and connected.

Short cut to approximating IV,HV

2010-06-30T02:27:00.000-07:00

Some of the benefits of sharing market information is the trainer achieves more clarity on specific concepts.

In delivering NSE program on derivatives , I came across a shortcut to approximating Implied Volatility(IV) and Historical Volatility(HV).
Normal approach to caluculating HV involves statistical caluculation.
Devangshu Datta of BS describes a thumb rule approach to estimating HV. It involves calculating the daily HIGH - LOW range as a % of Futures settle price. You can take say, a 20-day moving average of this in order to get a smoother value. This can be used as a proxy for HV.
For estimating IV, We can take nearest to money call option and nearest to money put option premiums and calculate the breakevens to derive a range. For ex Nifty at 5280, 5300C (premium 100) and 5250 P (128) can be considered. A strangle breaks even outside 5558 -5022. This 536 points can be expressed as a percentage of NIFTY 5300 approx 10% as a estimate of IV.
Black-Scholes options caluculator gives more precision but a thumbrule approx can be done as above

Technical Analysis @Manipal Education

2010-06-29T05:33:00.000-07:00

The training program jointly delivered by me along with another colleague gone very well.

NSE's Technical analysis material supplied to the participants provided unique way of classifying TA
Students liked the classification of TA tool kit and what tools to apply to Trending, Range-bound markets and transitioning markets from Bull to range-bound and vice versa.
Audience participation is very good with practicing traders and even top management from some brokerages thrown in.
I could bring value to the process through my emphasis on trading psychology and risk management mostly adopted from Trader Feed.
Intraday trading strategies with pivots is one chapter on the TA course.
I could personally appreciate how the basic concepts of TA can help the beginning trader have a grip on the market perception.
So many commentaries on Financial Press and TV became evident after going through this process along with my co-learners.
Much of the philosophy and terminology was effectively internalised by the participants by the end of the workshop as they were freely using the jargon.
Illustration of many concepts were done using TAME and ShareKhan 's TradeTiger platform.
TA concepts when viewed in a foundational sense clarified many of my hazy opinion on TA.

NSE - MANIPAL Training Program on DERIVATIVES

2010-06-21T00:43:00.000-07:00

I had the pleasure of taking classes for NSE-Manipal Training program on Derivatives at Hyderabad.

The educational material of NSE is absolutely top class.
The 14-hour program covered all Market Design, Microstructure and Analysis
Audience interacted very well with diverse profiles from JPMorgan, Dr Reddy Labs, Stockbroking employees like Kantilal Chaganlal, India Infoline, and Independent traders.
I could discuss various indicators for derivatives analysis like OI, CoC, PCR, IV by taking reference to DEVANGSHU DATTA's article in BUSINESS STANDARD - Smart Investor JULY 2007
Interpretation and understanding of Derivatives analysis by Devangshu Datta in Tuesday's BS will be very helpful to investors & traders in interpreting market direction.
Participants could appreciate the role of market design in taking trading decisions.

Simplifying the TRADING Framework

2010-06-15T03:34:00.000-07:00

Today I had an aha moment trying to explain a methodology to understand price action to a new student of Markets and Trading.

The need for reference points which act as handles for the trader is emphasised.
These price handles will make the trader make sense of randomness
New and developing trader could feel a sense of elation at understanding the complex world of Trading
When you can write your trading style on the back of your visiting card you can easily explain the approach to traders.

Understanding Investments

2010-06-13T20:13:00.000-07:00

INVESTMENTS is a subject that is better understood and interpreted through a quantitative and statistical lens. This will avoid many biases of narrative distortion,selective recounting and other heuristics mentioned in behavioral finance.

I would think INVESTMENTS by BKM & Pitabas Mohanty with good indian examples and data will help students of Investments learn the right way.
Practicing with data from NSE website, Yahoo Finance, BSE website is the way to feel and understand finance theory.
MBA Course curriculum is enriched in OU & JNTU. BlackSwan Financial Markets School plans to associate with MBA Colleges and B-Schools in Interpreting SAPM, Investments Courses with practical approach and live trading.
Bridge Course for BCom/BBA students can also be implemented.

Finance Education in Hyderabad

2010-06-13T05:01:00.000-07:00

As I ventured into financial markets education space in Hyderabad, I happened to meet many interesting people.

My deepest regard for Dr KG Ray of VJIM for his emphasis on Empirical Research and grooming students on research methodology.I learnt a lot from him academically even though there are minor differences with style of admin. I can vouch for the superiority of VJIM's PGDM program, its pedagogy, curriculum, student culture and Vibrant atmosphere with top class infrastructure.
Mr Vishnu Mohan of Firstmove Advisors for his clarity and confidence of his techno-Fundamental approach.
Damodar Sai for his Intraday and Technical analysis skills.
Harsha for his expertise in Commodities Trading and advisory.

Different ways of approaching the Market

2010-06-12T04:18:00.000-07:00

Some of my random observations interacting with market participants and self styled portfolio advisors

Need to appreciate that there are many ways of approaching the market from different angles
Market comprises of different risk and time frames. Both long and short may be right when viewed from different time frames
Market consists of RISK. It is like a raw material made available to the participants.They can manufacture their own risk ( dish)
Experts trying to tell about their succesful tips but unwilling to discuss methodology and concepts of Trading.

Trading the Earnings Season & FY 2009-10 Results

2010-04-11T03:51:00.000-07:00

Always the results season offers good opportunities and volatility for the Intraday equities Trader.

I would like to be ready and prepared for this earnings season
Infosys results on April 13 before Market opening ( BMO). Early results are expected to be in-line as market is not showing any trembling. Surprises happen in the direction of Trend ?
Identifying stocks in play (SIP) as per SMB Training
Proper stock selection provides most of the edge in this season
Information regarding the exact timing of company announcements of their results is not available to me ?
How far the announcements are priced in the stock and expectations
Post earnings announcement drift( PEAD) is some thing traders have to be careful about.
Interesting post on playing the earnings season

NCMP Level 4 Modules @ BLACKSWAN

2010-04-03T00:01:00.000-07:00

BlackSwan FMB-School is launching NCMP Level 4 Training from May 10

The modules we are covering are
1 Capital Market (Dealers) Module
2 Commodities Market Module

3 Derivatives Market (Dealers) Module

4 FIMMDA-NSE Debt Market (Basic) Module

5 Financial Markets: A Beginners’ Module

6 Mutual Funds : A Beginners' Module

7 NSDL–Depository Operations Module

8 Options Trading Strategies Module

9 Securities Market (Basic) Module

10 Currency Derivatives: A Beginner’s Module

11 Equity Derivatives: A Beginner's Module

12 Interest Rate Derivatives: A Beginner’s Module

13 Investment Analysis and Portfolio Management
BlackSwan aims to add value by access to Live Trading facilities, Thorough discussion of concepts, Using standard reference books like
INVESTMENTS - Bodie, Kane, Marcus, Mohanty
TRADING & EXCHANGES - Larry Harris
HANDBOOK Of FIXED INCOME SECURITIES - Fabozzi

NCMP

Financial Market Education

BlackSwan

24- Carat Financial Market & Trading Education to a very large audience.

Benefits of not Trading alone

2010-04-02T00:53:00.000-07:00

Since I started trading from an office , I noticed several changes.

Compared to home trading, I am more in control
It is difficult to go on tilt when your co-traders are observing you
I am trading more responsibly as I am assuming the role of a mentor as described by Dr Brett in The Daily Trading Coach
Some distractions relating to admin tasks may arise
Running a training and also trading operation gives me that emotional satisfaction of sharing ideas and developing clarity of thought
I hope this will exert positive influence on all the traders I encounter and associate with in this journey

Some very fine posts regarding this topic are

Doug Tucker on Trading Methods & usefulness of trading groups
Dr Brett on Networking

Professional Trading Course

2010-04-02T00:18:00.006-07:00

BlackSwan FMB-School is launching for the first time in Hyderabad CERTIFIED PROFESSIONAL ACTIVE TRADER Course.

My inspiration for this is derived from SMB training in US and CD integrated in Indian Context.
BlackSwan would like to provide solid basic foundation for trading in the markets.
Association with RLP securities will help in providing sufficient Intraday exposure to the active traders
Components of this course will be in the lines of Active Traders Course
All ingredients required for stock speculation like Intraday Fundamentals, Chart reading, Risk management, Trading psychology, Understanding macro data, Reacting to news will be dealt.
A disciplined environment and lessons from How not to run a trading operation will guide this effort.
Giving best chance to the active trader to succeed is the motto.

NCMP @ BlackSwan FMB-School

2010-04-01T23:48:00.000-07:00

BlackSwan Training can add value to financial market training. We are starting with NSE Certified Market Professional ( NCMP) a high quality program from NSE. Their study material is of top quality.

How BlackSwan can add value to NCFM certifications ?
I believe it is in detailed explanation and discussion of concepts
Providing live trading environment for students to observe markets
Learning about the thinking process of active investors and traders
Access to standard text books and case studies of International quality
Team work and seminars information sharing
Training by NCMP Level 4 Professional - ID 28075
Training by NSE Certified Trainer
Access to real time traders
Highly educated and qualified persons to give lectures

If the above combination is irresistible to any keen student of markets, BlackSwan is here to help you find satisfaction and success in Markets.

Financial Market Education in India

2010-03-28T03:10:00.000-07:00

Financial Markets have grown both in volumes and reach in the past decade.

The amount of literature available on Trading, Market structure, Various instruments has exploded.
Media focus on Markets has also increased phenomenally. Local Channels are also taking to business programming in a big way.
I would like to highlight some of the education providers I have come across in my research in the process of establishing BlackSwan Financial Markets B-School.
Finance Certifications : a) Kredent Academy

b) Ideators

c) NISM

d) ITM Financial Markets

e)BLB institute

f) FTKMC

g) Mansukh Institute for Finance

h) Equity Rush

i) APTART

j) Pristine Careers

k) Ace 3 levels

l) IQFI

m) Quantamatics

n) Torux

o) CD integrated

p) Inspire education

q) iicm india

r)iifp india

s) Kunvarji Academy

t) finosys

Role of Fundamentals in Intraday Trading

2010-03-27T22:03:00.000-07:00

In my new journey of BlackSwan Financial Markets B-School and setting up a broking office in association with RLP Securities I would like to share some of my observations

The role of comprehensive view of Market Context. Often beginning traders may be looking at price levels or chart patterns, where as they need to put all this into sectoral context, Traders Behavioral reaction patterns, planning the trade in terms of risk
It is taking time for me to get reconciled with lack of control when the trader is given a free hand and the limitless environment of trading will make the trader go aggressive at the wrong time.
As often the Chair admonishes in DailySpec, beginning traders fail to scratch the trade, when survival is very near.
The importance of survival cannot be overstated
Market tuition fees must be paid so that it repeatedly drills the riskmanagement rules into the trader's head.
The importance of market context was highlighted on Friday's trade when I am trying to trade Pharma stocks from the Short side.
Often CNBC's hyping of certain stocks or sectors may give the intraday trader fade the sentiment extremes.

NSE Certified Market Professional Level 4

2010-03-26T22:25:00.000-07:00

I am glad to announce that I have received NCMP Level 4 certificate from NSE.

NCMP Level 4 is awarded to candidates who have cleared 9 + Modules.
I particularly liked its new addition IAPM module which has lot of relevance and market interpretation scope with an MBA ( Finance) equivalent course content in it.
IAPM has been taught by me in various B-Schools with my major text being BKM,Nofsinger
BlackSwan is launching a 3-month full time/weekend batch for intensive training in NCMP Level 4 Course.
This course comes with a hostel accomodation, Placement tie ups with Brokerages, and Certicication assurance else fee refund options.

Importance of Trading Environment

2010-03-19T21:10:00.000-07:00

Intraday Trading needs to be conducted in a conducive environment.

1. As Intraday Trading needs intense concentration , the trader needs to avoid all distractions.

2. The trader needs to access his meditative flow state.

3. There needs to be no opinion sharing itch among fellow traders unless there is a clearly defined protocol. This reminds me of how Victor writes about Trading Operation.

4.Need for maintaining silence in the trading room.

5. I am willing to admit that these unnecessary mistakes cost me yesterday and I paid the market a huge tution fee.

Pursuit of ShortCuts

2010-03-15T00:28:00.000-07:00

In my interaction with many investors in the process of operating Blackswan FMB-School my observations

1.Pursuit of Shortcuts in the form of TIPS and sure-shot recommendations by investors surprise me .

2. How pursuit of money is put on top of market understanding and pursuit of knowledge

3.Market should give the participant energy rather than draining it

4. Having some framework or method in place of no method

I believe only when the market participants enjoy the journey they can go up the learning curve and increase their expertise.

Grand Strategy in Trading

2010-03-13T21:20:00.000-08:00

As a student of market,grown up on traderfeed by Dr Brett , I find his posts resonating in my trading approach.

1. In my recent effort to build a Trading & Markets Monastry in Hyderabad , I had immense satisfaction in interacting with Beginning Traders and Students.

2. I had associated with RLP securities in this venture to offer trading facilities. My need for intraday flexibility and easy approachability of top management together with sppedy response fitted with RLP.

3 My basic approach of Risk Management,Viewing every Trade idea as a hypothesis, having a Grand Framework for Trading ( Mostly derived from Dr Brett), Identifying the particular traders' niche, I am trying to instill in my co-traders and speculators.

4 I am fortunate to find able friends like Mr VVM Reddy an IIT Chennai Grad and and an expert physics tutor for IITJEE. He is very enthusiastic about fundamental research and deep value investing. Another trading friend Mr Venkatgiri an engineer who is very keen on learning trading and analytics.

Intraday Trading - Best practices

2010-02-26T22:55:00.000-08:00

BlackSwan is organising a seminar on Intraday Trading - Best Practices at Hyderabad.

1.Our office is at Flat 402, Srigurudatta Towers, Nizampet X Roads,Hyderabad -72
2.The motivation is derived from Dr Brett's articles on Trader Training,SMB Capital , Trading RM
3.Approaching the markets with a basic foundation on risk,trading psychology and structured way for continuous feedback.

Training on Financial Markets

2010-02-12T23:40:00.001-08:00

My effort to train Traders and students in Financial markets and trading is taking shape in the form of BlackSwan FMB-School at Hyderabad.

I came across many talented youth interested in Markets in this venture.
My inspiration is derived from many top-quality programs envisioned by Dr Brett, SMB Capital, Trading RM with the motivation from EdSpec, DailySpec.
I would like to implement Trading & Exchanges by Larry Harris as a foundation for students of markets as everyone is a lifelong student

BlackSwan FMB School

2010-02-11T02:40:00.000-08:00

It gives me great pleasure to inform all readers and well wishers that I have brought into existence Blackswan Financial markets B-School and Stock Trading Facility.

My aim to provide a professional stock trading facility with value addition to Traders.
Trading environment on the lines envisioned by Dr Brett Steenbarger and Implemented on the lines of SMB Capital.
Rigorous study,observation, review and feedback facilities for Intraday Trading
A methodical approach with Morning worksheet, Afternoon Review, Post Market Review will help traders immensely.
I would also like to implement programs for Practical NCFM +,Professional Trading,Research Analyst.
Some of my inspiration for this program in Indian Context derives from Kredent Academy, CdIntegrated.
My trading room contains wisdom from Dr Brett, Victor and Taleb.