You pay for the training

Yesterday was an expiry day. Naturally all the big traders geared up to deploy their whole capital and some more to squeeze every penny from the option contracts before they expire. And it is not uncommon for big traders to make mid seven figures profit at the end of the day. Some share screenshots of their trading terminal for the whole world to know, while others make sure they don’t let slip out any details about their account size. Well one such trader posted a screenshot of his terminal with a profit of 55 L. I have been following that trader for a while and believe me when I say that such profits are not unusual for him.

I usually don’t read comments of tweets, for this tweet I did. And among other comments one comment that caught my eye was something like this:

You must have used a lot money. If I had that much capital I could have made that much or even more easily.

Now, granted that the traded quantity was 28L which seems large. The trader has made roughly 2 rupees per unit, or 40 rupees per lot since most of the trades were in BankNifty. And anyone who has traded options would know that on the day of expiry 40 rupees premium is practically in the money. So that means that not all the positions were initiated on the day of expiry. Many must have been carried forward since the beginning of the week or may be even before. And when you carry option positions, you need to be sure of the range and the direction of the market. Adding the fact that market volatility is much beyond average, what the trader has achieved is no mean feat.

And the profits were not the result of his luck this day or this week or even this month. He has been active in the market for a decade now. Claiming that you can achieve similar returns just by having more money is like saying you can paint like Michael Angelo if you are given the ceiling of Sistine chapel to paint on.

And the motivation of the debut article on this blog was not to defend the trader. Heck he doesn’t know I exist. But I see a lot of parallels between the comment on that traders profit and the comments my artist friends get on their work. ‘It’s too simple’, ‘ I could have done it better and in lesser time’, ‘Why is the revision taking so long?’, ‘I only asked to change the color!’; these and many more.

Always remember,
You pay for the training, not the performance…

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