Transcription
In fact, my portfolio became half during the COVID time. It became half, half became 50% less. I think this is, uh, 2020. Blindly picking up one strategy that worked for last year and assuming that, or pretending that it's going to work for next year, that will not give them money.
How you use options to generate your regular income. Somebody can become a better trader is to really understand, bit, uh, understand what is happening in the environment and then try to adapt to the environment rather than, uh, so we can follow the same strategy in stocks.
Stocks as well. Absolutely. Absolutely. Are you doing it, sir? Sir, sir. How much return you generate by doing this strategy, sir? This strategy is generally, Namaste, Chief Technology Officer, retired full-time stock market investment, financially free income investment, investment portfolio underperform investing, Bangalore, comfort trader or investor, Hindi, English, except without. Hi, welcome, Rajendra. Welcome to our podcast, sir. Thank you so much, Vijay, and, um, I obviously enjoyed the last one. Day obviously here and, uh, thank you for being a great host. Thank you, sir. It is not like it's like I want to learn something from you, that's why you are here. So on the Grow channel, but I saw your simplicity. I was like, and I want to learn something from you and then I don't know. Okay, let's come to the point. It is not like that. And thank you, and I feel very glad. So thank you, sir. Thank you.
So thank you so much. I think the last meeting was great. We had a great dinner on the street side. I think that's what I remember and, uh, um, Bangalore to here yesterday when I landed. I think the traffic is very similar. So I'm not missing much.
So that's a good news. All right. Let's get on to that.
Okay, but I want to know more about your trading strategy and I know. Right. Like, so I have born and brought up in mostly Andhra Pradesh. Middle class to not say lower middle class, middle class, because dad used to work for public works department in AP state government.
We used to move a lot of, uh, small cities, I would say small villages rather. So a lot of my education happened in the government schools and then I did my, um, engineering and then the M.Tech. The only good thing that I did in the school was I was always topping the school and math has been my most favorite subject.
So I never imagined how math can be used in trading because today we'll spend some time on how some of the things that we learned in the school days can be applied into, um, trading as well.
So I'm the first trader or investor in my entire generation. Nobody, nobody so far, even today, nobody has invested into stock market. I think, uh, I do not know how I got the skill.
Uh, but my initial introduction to stock market happened, um, 1991 when Harshad Mehta scam came. I was reading, uh, newspapers, what is the stock market, etc. So I learned a little bit, but then obviously there was no guidance at that point of time, right? We do not have internet as well. But then when I got into my first job in 1998, I got selected through campus recruitment, uh, for TCS. So then I started learning a little bit and we, I had, I was working on a banking project, so happened to meet, uh, somebody from Kendra Bank in Bangalore. So then out of curiosity, I asked how to invest in stock market. The person did not tell much. But then he said it's very risky and you need to do a lot of analysis and it is not for the people like you. People should have a lot of finance background. Then I gave it up. But after 2 years again, 2000, the internet boom came and then I, uh, started searching on the internet and that's where I got into stock market. My first investment happened in 2000. Exactly. There used to be a broker called Equity Master. Now they are not there. Got used.
Ah, right. They have a website also.
Yeah, they still have a website, but then they, they start as a broker. Right.
So, and then I started with them and then it was a good journey. After that, I opened an IC direct and I have been doing investment from that time onwards. Uh, however, my strategic investment started from 2014. So 2014, uh, uh, because I was in the IT job, I traveled almost like 12 different countries. I was also working, uh, I worked in Australia, US, and Brazil. Uh, but then eventually 2005, I thought, okay, let me settle back in India. Uh, India, one of the biggest challenges is our salaries are a little less compared to what you get from the western countries or other countries, right? So, uh, but even with that salary, how do we really make some good wealth creation, uh, in India? So that's what my thinking. But then I was looking at a lot of options. Uh, earlier I used to buy stocks, and then as soon as they reach 10%, 15%, I used to exit. I used to make some money, but then it is not a massive money. It's like one or two lakhs here and there, and I was not very happy.
But 2014, um, um, I realized I need to do something which is a lot more strategic and also I started thinking, uh, uh, when I wanted to retire. Retirement is not for the, uh, not to have the job per se, but retirement is, I do look at tomorrow of financial freedom.
So 2014 when I started, I wanted to, uh, retire by 2025 December. Exactly. I wrote on my notebook or Excel sheet, and then I started planning how much money we need to retire.
So at that point of time, my calculation was approximately about 6 crore. With a good lifestyle. Uh, and, uh, you should have one house, car, and some other basic necessities are met. But, um, if 6 crore, the good thing in India is, even if you get about, let's say, 12%, 15% in a year, that's a good income for you. So we can definitely live, uh, not a luxurious life, but a lavish life. Yeah.
So that was the calculation. But then I started also backtracking. If I have to, uh, reach 6 crore, what I should do now? How much I need to invest and then what, what should I do, right? So,
I think one thing that I wanted to really, uh, carry to the audience is, uh, there is always this dilemma around how much percentage of salary. This is mainly for the working professionals. We need to invest. There is always that dilemma. People will come with 10%, 20%, 30%, 40%. But then I wanted to really get rid of that equation.
You want to get rid of that equation? Only there are only two options left. One is 0%, one is 100%.
So I went with 100%. The idea there is, you, whatever the salary that I get, could be two lakhs, three lakhs, or 1.5 lakhs, whatever it is, just put everything into stocks or mutual funds.
On the day one of the salary. Then how you will run your house? So what I did was, uh, about 6 months, whatever the corpus that is required to run the home, I kept that outside.
So 6 months is approximately, at that point of time in Bangalore, about 80,000, 1 lakh, because we have a house already.
So, uh, with that, even if you do the school fee and other calculations, so that is a major one. Approximately that will come to that much. Let's say one lakh. So six lakhs, we should keep aside and then the remaining money, you pump into equities or mutual funds because the reason is, we never know when the momentum would come into stocks. Nobody knows, right? So we can do approximate calculations, but then when the time comes, I do not want to be sitting outside.
But I think that strategy worked quite well. I think there were some booms. I was able to really capture. Obviously, there were some booms during the 2014 onwards. And then, um, again, my stock selection at that point of time, there was no calculation. Um, but that's how somehow I started. So but then I think I really caught up very well on the COVID boom.
So COVID boom, a lot of people said that I should invest in the real estate. As soon as, in fact, my portfolio became half during the COVID time. Became half. Half became 50% less. I think this is, uh, 2020, uh, I think the February to April or.
So what was the value of portfolio at that? I had only one, one CR.
So your target was to make six CR by 20. 2025, but then. But on 2020, you was having one, one. It's about 1.2, I think 1.2 crore. It became. Become half in 60 lakhs and 50 lakhs around that. But then because I was pumping money as well, so but eventually there was a lot of growth happened after the COVID.
So, uh, that's the journey. I think one important point that I missed, not on investment, but I did my IM course back in 2013, Kolkata. So that's where I got introduced to derivatives.
So derivatives as an instrument. I liked it. Uh, and also I found that the, the options, the person who did the options calculation, Black-Scholes model, that we call it, they got a Nobel Prize.
So just for the calculation, if they got a Nobel Prize, I thought there is something worth to really learn, right? So my initial introduction of options started back in 2013. I spent about 4 months, just to understand the strategies. I did not trade. I did not do a single trade, just to understand the strategies. In that point of time, we do not have any tools like Sensible or Upstox, any of those tools. We do not have.
So my basic methodology was to go to Excel sheet, put across the payoff chart, and then see when the stock goes to some number, uh, how the payoff chart would look like.
I think that doing that manually helped me quite a bit. Now, all the strategies I can imagine in the brain a lot more easily. It's not required for us to use any tools. Yeah, that's how I think that's the introduction of both investment and then the, this one, uh, the trading or the options.
I also did quite a bit of mutual funds. Uh, some of the mutual funds I've been doing for years.
Uh, that is also going on even today. Though I'm not in the full, full-time job, I do approximately about five to six lakhs each month as an SIP.
Oh, good. So what I liked in your journey, income 10%, 20%, you have to invest, but what I like in you, sir, is, suppose you have a salary of two lakh, you will invest the rest in mutual fund and equity. So that gives you a good edge compared to others.
100%. Okay. And I think in 2014 and in 2020 also, you know, bull run was in mid also, but the major journey started in stock market from 2014 and one 2020 also. So and again, off the camera. But sir, now I want to understand and I have noticed one thing, who is good in option selling, especially, they are actually good. This is again one, one more example. Options in 2014, May 2020 investment, like how you select mutual fund or how you buy any stock. Options investment, it's up to you, sir. I will start with options mainly because that's, uh, that gives a lot of excitement.
Because I also feel, um, happy, when I do options trading. So it's the, there is a, there is a concept called flow. Flow is a concept where what happens, I, when I do painting, for instance, right? So when you go deep into painting, you reach to a stage where it is timelessness, where you do not feel like time is actually moving. So when I generally come, try to build some strategies or start doing the options, I get into that stage.
It's difficult to explain, but I do enjoy options. So let's start with options. It is easy.
Okay, sir. Tell me.
All right. So I, I do multiple strategies. But I think, uh, today I'll spend on, uh, one basic idea which I think all of us can probably start doing as early as Monday.
Okay. So I, most of my strategies, while they are based on the momentum or the neutral, but then the one of the famous thing that I do is based on the probability models.
Okay. So probability models, personally, I worked with retailers for a very long time. So we used to do a lot of forecasting, what the sales would be for next week or after that week or whatever. But then what I realized was, even if you have sophisticated models, it's very difficult to forecast. And, uh, generally in the world, right, anything that that happens in the world, there are six phases. I would think there is a simple, simple way of doing things. There is complex, there is complicated, there is chaotic. So stock market also really falls into one of these categories. Uh, when I say stock market, the regimes would change. Some days you would see, you would actually, even if you're a trader, right? You will realize that some days everything works in your favor. You have the stop losses, you have the, let's say, pivot points, moving averages. That's like a very simple pattern. You will also have complex patterns where you believe something is, uh, happening, but you do not know why. So that is also one of the complexities of the, or one of the way the stock market as a system would work. Sometimes the things will become very complicated. You will understand there is some bit of a relationship, but you do not know how it is actually happening.
Okay. You would have seen, for instance, uh, I think 2 weeks ago, uh, there was absolute sell-off in commodities and US markets. Market. I think one Friday, everything got sold off. People started wondering why. So that, that actually, that's not complex, but it's very complicated because we do not know why it is. Sometimes it would be chaotic. I think all of us experienced when the Jane Street or any of these or FAS came, right? Nobody had any clue how the market is going to react. So now, uh, you look at all the five, four different things, right? You have the simple, complex, complicated, and the chaotic.
So a lot of times the failure of the traders would happen, um, when they try to imagine everything is simple.
Okay. So and then they try to put, let's say, whatever the environment, right? Let's say go with Supertrend or the moving average, assuming that it's going to work. But that is actually meant for a very simplest possible stock market, which I think out of 100 days, maybe that will happen, maybe 10 days. That is one reason a lot of times the people in the trading community, they lose money, uh, just because they do not know which strategy to apply for which kind of a system.
Okay. So can we know, uh, the systems in advance? The answer is absolutely no. We will not know. We'll have to really go through the journey and then try to find what would work for them.
There is one more misconception. If you probably learn a lot of better strategies or do all go or whatever, you will make money. But again, that is a misconception. The reason is, stock markets are the derivatives as an instrument. It is, um, built in such a way that only 10 to 15% people make money. That's all. Whatever we do, that's all there is. Even today, we see that any industry, let's take movie industry, Bollywood is here. So whatever the hard work that we do, only 5 to 10% movies would.
There is one book, 80/20 principle. Pareto principle, right? That is that is how the world works.
So, uh, again, um, stock market being a very competitive one, um, and people beat each other quite well, right? So the percentage of success is going to be only less than 10%. Whatever we do.
I think, but how somebody can become a better trader is to really understand bit, uh, understand what is happening in the environment and then try to adapt to the environment rather than blindly picking up one strategy that worked for last year and assuming that or pretending that it's going to work for next year, that will not give them money. We'll have to absolutely keep evolving. And if somebody doesn't want to spend the time, effort to understand what is happening in the market and then adopt themselves to the future. And for them, the derivatives is not the instrument.
Okay. They shouldn't do it.
So, sir, how you use option to generate your regular income?
100%. So I will actually quickly introduce to one little model that I use very regularly.
Okay. Uh, let me show with some examples. So this is, uh, one model that I widely use. Let me give a some bit of a context.
Okay. So, uh, this actually goes with the fundamental philosophy of everything in nature, there is an upper limit and there is a lower limit. Uh, this also goes with some bit of a Pareto principle or some bit of a normal distribution. So when it's a normal distribution, if you have, let's say, if you pick up thousand people, even in a city like Mumbai, uh, you will find probably top 10%, 5% would be very richest people. Lot of people would fall into middle class, and then there will be some people in the lower, lower to lower middle class. Right? And again, some city, city things would change from area to area, things might change. But I think overall, that is what it is. Now, if you can apply the same principle to stock market, for instance, if you take Nifty. So the idea is, how far Nifty can go up or down in a week?
Okay. So will it be 5%? Will it be 4%? Will it be 3%? We do not know. So now, how do we use this data? Before I get into the data, I'll explain. So for instance, let's say somebody wants to do a strangle, short strangle. In fact, whatever I'm going to say here is mostly on the selling, not on the buying, and it's very strategy-based. Let's say somebody wants to do a short strangle. So now let's say every week, if they do 3% up, 3% down. So which means that, let's say if Nifty is trading at about, let's say, 2,000, 24,000, calculate 3% to 24,000, which is approximately about, uh, 600, 700 points, and then you calculate 3% down to this one, and then you take a short strangle and then obviously put some hedges and then leave it there.
Okay. So now what would happen? Um, the data says that this is going to be approximately 90% of the probability that the person would actually make money.
Okay. Let me prove at the data. Uh, I might be wrong, but let me show. So what I did with the, uh, data that we have, this is not the weekly data. This is expiry to expiry data. Uh, and I think all of us know that the expiry got changed from September 3rd last year. Before that, it used to be Thursday. Right now, it is, uh, Tuesday. So let me quickly show what happens.
So how much time of data we have here? Uh, we can put as many years as possible, but right now I had put about, uh, 7 week. Uh, yeah, no, I had put from 2021. We can also, let's, 2021, okay. 2021, right? So, okay.
But before I go ahead with my data analysis, let me start with a little interesting story. This actually happened in World War II.
Okay. So in US, in World War II, US got some airplanes and then they used to send to the opponent territory. And some aircraft, they used to come back, some they never came back. So now imagine that, let's say some 500 airplanes went to the opponent's territory, maybe 200 came back, 300 never came back. Now, US military want to do some analysis saying that, hey, what is happening? Why some are going, some are coming back, some are actually not coming back. So suppose if you analyze the aircrafts that are coming back and, and then make them stronger. So and we, that will actually give some analysis around where the opponent is actually shooting the aeroplane. Correct. And why they are disappearing and why they are not coming back. So then what they did was, they got all the, whatever their aircrafts they got back, which, which obviously survived. They did a mapping. If you can see in the picture, right? They did a mapping where the bullets were actually shot.
By the opponent. By the opponent. And then as you can see, there are some bullets were shot here, here, here, on the wings. Now the analysis US military want to do is, let's bullet actually our opponent is shooting. Our opponent is shooting the bullets here. Let's make these, uh, parts stronger so that aeroplane will become lot more stronger.
But then, um, that's not what the data says.
Okay. So, uh, there is a statistician called Abraham Wald. What he said was, hey, this is all great story, but then we do not know what happened to the remaining 300 aircrafts. So we do not know where they were shot. Right? So there is a high probability that they were actually shot in the places where we do not see the bullet blitz here, for example, here, here. Okay. That's why they, they not came back. That's why they, they actually did not come back. They never survived.
Right. So now what happens? As humans, we tend to see the data whatever we can see, but there's a lot of hidden data that we will never be able to see. Correct. So same concept, we'll have to use for options as well.
Okay. So options also, it's a lot of times we tend to say, for example, do backtesting. Right? Backtesting definitely gives how you will be successful, but it will never say how you will be failure.
Right? So, uh, in the options also, the concept I built over the period of time, so we will always come with a hypothesis saying that the strategy would work. Now, as a trader, we also need to think, what if it doesn't work?
Okay. So and then if you make the strategy such a way that, uh, what if it doesn't work, you will not lose a lot of money, but if it works in your favor, you will make good money. I'll not say a lot of money, good money.
So now when a trader is taking care of the losses part, there are only two options left. Either they'll make money, or either they get to zero. Both in my view, options world is really good. Even somebody doesn't go into losses, they still in the 90%. Right? If they're able to get profits, they're above 90%. So they are still good to do. Huh.
So now our strategy is ideally not only ideally, our strategy should really focus on how do we not to get into losses. As I said, if we cover ourselves, we are good. It's like very similar to the traffic. Sorry, when you're driving the car, right?
Right. If you're not actually meeting with an accident, Correct. Then we will have a great journey. You can go 100 kilometers, 200 km, or whatever. But, uh, our first priority is to, how to avoid the accidents.
Okay. Okay. So that is the concept that I strongly believe. So whatever I built over the last 4-5 years, most of my strategies are based on this. However, uh, I also had tough days. Uh, I will not say that it was a smooth journey. Right? So the tough days happened mainly because sometimes I do not follow the rules that I set. Sometimes what happens when you, when you have, let's say, 10, 15, or even the, I had my longest streak almost 22 days. So when you get 22 days of green streak, then you want to take some risk.
Yeah. So that is one mindset that each trader has to build, and that is human. Uh, and I don't think any textbook or any algo will teaches teach that, right? So we'll have to go through the journey. There is no way that even if I say to somebody, do not take risk, that doesn't happen, right? So somebody has to go through the journey. So for instance, as I said, the survival bias, right? Let's look at, uh, Nifty in the real world. So if somebody wants to take a 90% probability trade. So this is basically the data that you have for almost like close to 6 years, approximately or 5 years. So out of this, if you really carefully look at, Right. So we have very few instances where the Nifty went above this particular percentage. This is basically,
Okay. This is percentage area. Uh, 0, 2, 4, 6 upside, and this is downside.
That's right. -2, -4, -6. That's right. So what, how do we read this, right? So for instance, if you look at here, this is basically approximately 3%. This is also 3%. 3%. So now what it says is, um, if somebody takes a strangle which is 3% up, 3% down, the probability of they making money is all these dots, they'll make money. Right? So but then we have few instances. One dot is one day. One week. One week. One week in the expiry week. Expiry week is generally, uh, in the current world, it's a Wednesday morning, whatever is open till the Tuesday next Tuesday closing. Okay. So we have very few instances where that did not meet. If you take, let's say, lot, last 269 occurrences, so about 14 times it actually fell down.
Okay. And then 14 times it actually went up. Right. So very, very few scenarios. Suppose, let's say somebody says that, hey, I do not want to take so much risk. I want to see 95% probability.
Okay. Okay. So now let's see how many times it will actually fall into within the, yeah, the upper band and the lower band. So now we have very less, it's seven, and then seven. Bottom seven, and then the top seven, that's all. So by doing 4% range, our probability increased.
That's right. Right. Of course. Yeah. Probability of success would increase. Right.
So now, as a trader, right? So as I said, if somebody is able to take this trade continuously for, let's say, 269 occurrences, they will only fail, uh, 14 times, 5.2%. That's a good number. Yeah. And the remaining times they will see the success. Right. So now, uh, the strategy should not end there. Uh, let's say somebody doesn't want to really do, uh, both triangle. They just want to do a spread. So let's say if they take spread.
What is spread? Sir. Spread is basically, you sell a call option. For example, let's say Nifty is trading at about 24,000 right now. You sell a call option, let's say 24,600, right? And then you buy a call option at 24,800. So you are selling a call means you are bearish in the market, and then you are buying again a call to hedge the selling. To hedge the, yeah, I mean, I will correct that. I'm not necessarily bearish, but I'm actually, you mean to say that that market will not certain level go above that. Yeah, got it. So can it reach 24,600? Stop there? If you're lucky? Absolutely. Why not? Definitely. So other than buying call, you are selling call because that premium will erode because of the time correction. So that is the more probability there. That's why you are selling call, not buying call.
That's right. If somebody, as I said, if somebody doesn't want to do strangles, for instance, they just want to do a bear call spread or bull put spread or whatever.
Okay. So even if they take that each week, so the probability of success is approximately 97, 98%. You can actually see the 7 is also goes up, right? So now 5.2% suddenly will become 2.2, 2.5%, 2.6%. 6%. So, uh, these are all very easy strategies. Anybody can do it, and this is based on the probability and then the mathematics. There is no rocket science.
Okay. So and the same thing can be applied for, um, for instance, a monthly as well. Suppose if I change this to, uh, monthly expiry. Let's see what will happen.
So what is this platform? I have never seen this thing. This is my own code. I wrote, uh, last five years to.
Okay. Uh, I mean, anybody with the today emergence of, let's say, uh, the AI, right? Lot of people can sit. So you write this code for your, uh, data analytics. My data analysis, for example, before I take any trade, I mean, right now, anyway, Nifty, I do not really check it because it's already, it's already there in the mind. Okay. But let's say tomorrow, if I have to take a trade on a, a stock which I do not have the data pre-dated available, then I'll go and then come here.
So, sir, in monthly, there is a good probability. Yeah, that's why this is the data that we see here. Right. So,
Tell me, what is this about total outlier percentage? What does that mean?
So, for example, if you see here, right? So as I said, monthly, we are looking at approximately last 66 months, right? And then the total outliers are only four. Four in the sense, if I again go back to the percentage, this is approximately about 8% or 7%. Actually 6.91%. Almost 7%. Uh, below is 6%. 6%, 5.7%. What, what this data says? If you do a monthly expiry, the probability of Nifty going below 5% or 6% and above 7% is only four times. Is only four times.
Okay. So the percentage is 6.1% is the range. That's right. And it is going above that range only four times. In the 66 monthly expiry. That's right. That is what that data say. Data says, yeah, that's right. Here also, same concept, right? So here also, let's say somebody doesn't want to do strangles. If they want to do bear call spread or the bull put spread, they can directly do, and the probability tremendously would increase. So right now, the success is, as I said, it's approximately about, uh, uh, 6% means close to 94%. Right? Now, when they try to do, let's say, just sell the call option, then the probability approximately will go to about 97%, 97, 98%. Yeah. And then they need to do this continuously. Last, if you look at, right, we had this one outlier which was March, which was because of the US-Iran conflict. Correct. But otherwise, after that, market actually have gone back to the band.
Okay. So the spread is basically, we are making only one-sided position with the hedge. That's right. Okay. Got it, sir. So, for instance, so let's also increase this, um, range instead of, let's say, 2021. Okay. Now we are increasing the past history. Let's say, to the understanding that let's see if it actually works. That's very important, right? I'm sure in the COVID times, um, there were some spikes definitely. Uh, yeah, you can actually see the, this is definitely the COVID time, which is 2020. Again, sir, the actually the result is almost same. Very similar. Yeah, very similar. There is not much of a change. There that previously it was 6.1%, now it is 5.8%. That's right. Absolutely. But now 138 monthly expiry we have. That's right. So now, um, now I think the one very important point I want to bring. Right. So for instance, um, our strategies should obviously based on the success here, but I think as a trader, we also need to look at what if there is. Now I can do that. That is that all are bullets, but that's right.
Okay. Absolutely. So now tell me, sir, how to, you know, understand that concept.
So right now, so in, so these are all the outliers, right? As I said, our strategies should also take care of the outliers. Correct. Because otherwise, making money in the, losing money in that, it's straight away, it's there is no brainer, right? You simply do a spread or strangle, whatever. So now let's say if somebody is doing a strangle, for instance, I mean, ideally, they should have the hedges.
Okay. So hedges and then let's say the market. So strangle means just I'm understanding investment that already I'm doing, but I want to do this also. Strangle, right? This is the strangle. But that's right. So that what you want to say now? Absolutely.
Okay. So generally people strangle. Um, sometimes people do not do it. The, but what is the original strangle? They don't buy hedge. Right. So short strangle is there is no hedge. Okay. There is no hedge. So it's a without hedge. That's right. So for example, if one leg will hit stop loss, that is the main concept of the strangle or it will, you know, concept. 100%. So right now, let's say, uh, as I said, the short strangle is basically selling the call option and selling the put option at the same time. So now the market, if it stays between these range, right? It will automatically make money. Both will become zero and then it will make money. But I think if you take a scenario like March, which is very recent, right? So what would happen? Obviously the call would have made money, zero, it would have become zero, but the put would have got into losses. So now, uh, see the thing is, the people would have made a lot of money in the previous occurrences, but then why to lose this money also now? That's right. My, my request to all the traders is to not to do any, uh, naked strangles. When I say naked strangles, you would not want to just sell the call option, put option without the hedges.
Okay. So a lot of times hedges are meant for the margin, but I think, uh, in this scenarios, hedges can also be used for the protection.
Okay. So that's a very important, uh, uh, thing that traders has to do. Again, this, these strategies, they're not rocket science. They're very simple strategies with the going with the data. Anybody can, uh, build those strategies. So this is one easy monthly expiry or weekly expiry. Uh, anybody can do it, and these ranges, as you can see, right, they do not change drastically. Correct. That's the reason I wanted to, for example, let's say I did for the monthly. Right. Let me change this to weekly. If you remember the previous.
Okay. So in monthly, approximately 6% range is there. Around 6%. Around 6%. I also want to make one more very important point. It is general on Nifty. It is profitable to do a bull put spread compared to bear call spread if somebody wants to do it. The reason is markets, as a nature, they tend to go up. Right? So eventually they'll go up. There could be some drawbacks here and there. But the advantage with this is the bull put spread, what happens, when there is a fall, obviously we need to protect the bottom. That's where it is always a spread. Bull call spread also would work, but then the challenge is, as I said, the market naturally would go up, right? So instead of, if somebody wants to choose between these two, my personal choice is a bull put spread. If somebody wants to do strangles, again, that's a different thing altogether. Yeah.
So I now change to weekly. Let's see if you remember the previous numbers. It was like 6.1%. Let's, uh, go back to the previous numbers. So it would be, yeah, it's actually even. Ah, but now, now we have more expiry. More expiry. That's right. So in fact, if you look at, right, this entire area, it did not move much. So it was very stagnated, right? So and also you can see here, it's also very stag.
Okay. So now tell me, that's what I said. So for strangles, it is important to put the hedge as much as closer you can, so that you will not get into unlimited losses. That is the one thing. So as I said, even if you put this model, right, there is always a possibility that you will lose some money. But then over a period of time, if you do the same strategy continuously, the probability of winning would be a lot more higher.
Okay. And if somebody doesn't want to do the strangles, um, the second advice is to either get into bull bull put spread or the bear call spread, one of those. So in both the scenarios, there will not be unlimited losses. M. But the probability of success would be approximately about 90, 90, 96%, 97%.
Okay. It is like 6%. For example, market is now 24,000 and 6% is like 25,440. 25,440. Okay, sir. 25,440 call, 240US, 640 call, maybe another 300 points up, 300 points stop. That's where you will be able to protect in the worst-case scenario.
Okay. So again, that is basically if somebody doesn't want to take the risk. So even that, the remaining 2-3% risk, they wanted to aid. When I say risk, I'm not talking about not getting into losses. That is very different. So for basically come down to 50,000 or 60. Absolutely. So instead of getting into unlimited losses, we'll get into defined losses. That's right. So that is when I say defined loss, that is risk management. Correct. So I think any strategy that we take, right, we will never have 100% success. 100% survival. Yeah. So now, as I said, let's say if you're aiming for, let's say, even 92% success, the idea is the remaining 8% we should not get into unlimited losses.
Okay. That's the. Got it, sir.
So I mean, this is one model that I use, uh, quite extensively. This got a lot of other details. Um, so we did, for instance, let's say we can also get into, uh, you take any, any stock, right? So for instance, let's say, so we can do the same analysis for Reliance as well. If you go here, so Reliance also, suppose if you take, you want to get into 90% probability, you have very, very few scenarios where Reliance actually again, uh, came out of the, uh, upper band and then the lower band.
So, so we can follow the same strategy in stocks. Stocks as well. Absolutely. Are you doing it, sir? I do. Yeah.
Okay. So how much return you generate by doing this strategy, sir? So this strategy is generally gives about 2% to 3% or a little more than that. The sometimes you get into 5-6% also. The reason I'll tell you. So generally, let's say start with this triangle and then you take the case like Iran-US conflict, right? So you know that market is not going to come back. So now when you take a call option at about plus 6%, you know that it will not come there. So you slowly move that, uh, move down, move down to maybe, uh, minus 3%, minus 4%, or even 0%. Right? So that way, you will be able to make a little bit more money. And you keep, keep that original 6% to there only or you close the, put again, depends. You can do adjustments here and there. Today, I'm not going to cover the adjustment part, but generally, if somebody doesn't want to do adjustments, this is the easiest one. And can we maximize the returns out of it? 100%. Yes, but then there got to be some bit of an involvement and then some bit of a thinking around what could happen in the market. You are a full day on the screen? And I do spend substantial time. It's not. So, for example, so there are two ways you can screen time.
Okay. So one way is, uh, going as much as far you can and then do a fixed strategy, and then you are not much worried about what would happen to the market. I will not do adjustment also. You will not do anything. That is basically you sell a spread. You, I'll not say sell a spread. You execute a spread, either bull call spread or and then you leave it there. That is the easiest, and whatever happens, you're not worried, and then each Wednesday morning, you wake up and then execute at 9:15 or 9:30. Forget about it. Even I do spread also. The end also, same thing. There is nothing that you need to do. So it will automatically give the money. That is the easiest one. The only thing is, as I said, if you do 100 times, maybe three, four times it will lose money. But it will not do substantially. You will, it will lose maybe every week you are making, let's say, 2% or 1%. % even 1%. So let's say in a bad week, if you're losing even 3%. That is still okay. The reason is out of, let's say, 100 weeks, you are losing 3 weeks, which are about 3%, which is about 9% overall, for instance, and then remaining 97% you are making 1%. Correct. So even if you make 0.5% still it is profitable. Right? So, uh, then what happens with this kind of strategies? There is no time that you need to spend. You will not be much worried what is happening in the world. So there is no rocket science there. And, uh, uh, for example, for one lot, if I want to call, if I want to sell call and if I want to sell put, because this is the main strategy, that's how much margin I need? I think Nifty, we need about 60 or 70,000. One lot. I generally did not do, but I, I, yeah, I think it's around. And by buying hedge, it will reduce the margin. It will substantially reduce. But actually, we are not buying the hedge because we want to reduce the margin. We are buying the hedge because we want to control the risk and then we do not want to monitor at all. Right? Uh, and we will do the same strategy for, let's say, 100, 100 times. Then then automatically money comes. Okay. So I do, yeah, I do portfolio, but this is like carry forward strategy. M2M. Because this is the rule. Now, 50% margin, it will come from your pledging and 50% you have to cash. An additional M2M also.
So, right. So I have liquid funds. So that would take care. I think sometimes I have to pay interest because I do not want to put all the money into liquid funds. Okay. So liquid fund, we can pledge as a cash. That's right. Yeah. And stocks are pledged as a stocks. And from there, we will get a margin, but we can use only 50% from the stock and liquid fund. For example, whatever liquid fund we are buying, so that we'll consider as a cash pledge equivalent. 100%. Okay. Okay. Sir, to strategy run monthly, almost 3% to you can maximize to 5-6% also. Yeah, I think I would say 2% minimum. Ideally, it will be definitely better than this, but I do not want to. So, sir, 2% is really good. If you, if we consider 2% monthly, so it's like 24% yearly. And if we consider all the expense also, at least I will get 20% monthly extra from my portfolio, what actually I'm holding right now. 100%. Absolutely. Okay. So this is just one strategy, but you do other strategies also. I do a lot of other strategies as well, but this.
Is the simplest and easiest one. And as I said, if somebody, this is like no involvement strategy, right? As I said, uh, if it is a monthly expiry, wake up on the last Wednesday of the month and then just put this strategy. And then revisit the strategy after again a month or so.
Weekly strategy, we have to look at every Wednesday and then redo the things because anyway, the Nifty automatically, they expire. There is nothing that we need to do. Okay. So this is the easiest one. So this can be applied for the stocks as well. The stocks anyway do not have the weekly expiries, but I do for the monthly expiries. So you do this strategy on the stocks which you are holding.
Holding or uh, no. So the stocks that I'm holding, generally I do covered call. Okay. Covered call is basically when you have the one lot equivalent of stocks, sell the call option. That is probably the easiest one. And uh, there is also one more strategy that I do very regularly called the cash secured put. Cash secured put. So it's basically sell the put option, let's say one or two lots, and then uh, if the stock breaches your number, you take the delivery. Take the delivery. If it doesn't, then it's these are all very peaceful strategies. There is not much of a brain that is required, and there's not much of an analysis that is required.
The only thing that I do when it comes to, uh, covered call or the, uh, cash secured put, I do look at what range that stock could move. Depending on that, if you take, what happens, you would not, you're not forced to take the delivery. You will still make some money. So I'll give a very simple calculation, right? So for instance, let's say if you do, uh, one lot each on, let's say all top 10 Nifty stocks. Then they'll give, each stock might give 4,000, 5,000 in a month for a selling a put option, which are like safest one. Now, uh, somebody would argue 4,000 looks very, even if you do smaller, very small amount, but multiply four with 10 stocks, which is about 40,000. And then, um, this is approximate number, right? And 40,000 multiplied by 12, that is about 4 lakh 80,000. And this is for one lot. One lot only. And then there is no stress. If somebody is getting 4 lakhs 80,000 without putting any effort. So why not?
Someone has an early salary, sir. But how much, how much capital we need to do this? One lot, uh, it doesn't require too much of a capital. Again, I do not remember exactly, but it would be around around one lakh capital. One. And you are saying you have to sell only put? Only put. That's it. And if it will come to your price, you take delivery. If you want 100%. That's right. That's okay.
So sir, just this is one personal question. Answer portfolio size. Uh, so right now, my, uh, stocks in mutual fund comes to about five, about 5.5 CR. Okay. And, uh, I do have some money like cash. Uh, which I do mainly for the like, I keep that cash mainly for the cash secure put. Okay. I keep that as one, one, two. It's actually two CR right now. So overall, it is, you can say 7 CR. Uh, and out of seven C is that five CR I'm invested. And within that five C, I also have the liquid funds and then the stocks as well. M. And the 2CR I kept like a cash. In case, let's say if I have to take a delivery. I have two options there. One option is, um, uh, I break the liquid fund and then convert that into correct money. Right. Or other, because the hard cash with me, I keep on using that. So right now, even if I keep that cash outside, right, so they are generating some money.
So that is how you will. So with all this your capital, how much percentage return normally you generate by doing all this offset strategy, sir? So generally, I aim for, uh, 2 to 3% for sure. And sometimes it will get into 7, 8%. Sometimes it probably get into maybe zero. Some. Wow. So it depends. And, uh, the my ability to take risk also depends on how I have done in the first one or two weeks of the expiry month. Okay. If I do well, then I take little bit risk. If I do not do well, then, um, I tend to play a little safe. Uh, but overall, I, my, as I said, my strategy is to not to lose the capital. So that's very important. And even if I do not make money, I'm absolutely fine. So the reason is, uh, we get some dividends here and there, we get some interest from the liquid funds. So the survival is not a problem at all. M. So that's the reason if I get into zero, I feel it's a, it's a good month. Anything above zero, great month. Okay. And if you are able to get into, let's say about 2 to 3%, it's like, it's like exemplary. So that's how I.
Okay, so sir, now you are not doing, uh, you are fully retired from the job and everything. Now you are not doing freelancing also or anything? Okay. So I will, uh, so I will, uh, yeah, retired. I think it's a big. But I think I can tell now I'm working more. Though I do not have the corporate job, but still I wake up at about 4, 4:30 in the morning and then work till 10:00. So today I do enjoy doing a lot of coding. I mean, this is one program, but I like this. I probably would have written almost like 100 different programs. Okay. I enjoy coding and then, um, um, obviously I spent time with the family and other things. But keeping that aside, uh, uh, 9:15 to 3:30, I'm fully into this one. In fact, I start some analysis in the morning itself. So recently, because evenings I'm getting a little bit tired also, started doing commodity trading. That is only last 3, 4 months. That is going on very well as of now. So, uh, yeah, I think retirement probably only from the corporate life, but not from the active life. Yeah, 100%.
Okay, sir. Create savings, equity market, option. Options investment. So I had a very crude way of looking at the equities earlier because I did not have a lot of tools those days, right? So, I used to put all my portfolio into Moneycontrol that point of time and then see how the portfolio is going. So one thing that I observed there is in Moneycontrol, um, app, you got to see how the stock is doing, let's say last one day, last one week, last one month, last three months, and six months and 12 months or whatever. So now we got three, six different variables. One day performance, one week performance, one month performance, six month performance, three month, six months, three month, six month and one year performance. One year performance. Now, that point of time, because I was also in the full-time job, the easiest way is to look at the stocks, some stocks randomly or some stocks with the watch list. Which stock is actually, uh, have more greens? For instance, let's say out of these six, six time frames, if a stock got, let's say four greens, then I would think it's kind of a momentum is building. I'm not much worried it's one day or one week. But generally, if you have six time frames and then four are really green, you go on and put the money. And then if the, there are only two greens, I will not put the money. And two to four, I will put into watch list. So, and then if everything is going to red, I will obviously exit. But honestly, I'm not very good at exiting. Generally, most of the stocks that I buy, I because I do some bit of a fundamental analysis and then try to invest into stocks which I believe they're going to grow. So, uh, that, that is the reason some stocks I never exited so far. Uh, for example, let's say IRFC, CDSL, BSE. But I think, uh, the mistake of not exiting, that also added a value because some of the stocks went, uh, like multi-baggers that gave a lot of money. So, but then that was the strategy. So as I said, I'm not very good with exit. Uh, but right now, when the market started falling down from 2024, I also started looking at what is the best ways to exit the stocks. So I think that eventually I learned over the period of time. Uh, but that was the very basic, uh, momentum strategy. So right now, I built some more tools around it. But before I get into that, I will probably introduce very simplistic one, which I think anybody can go on and do as early as again next week.
So this is basically, uh, is applied on ETFs. In fact, I myself put the money into this one every week. I started doing for last couple of weeks. M. The idea here is each Monday morning, I would go on and run this program and then understand what are the ETFs that are performing or not performing. So right now, I'm doing a contra ETF strategy, which means that when the ETF is not doing good, I will go on and put the money. Okay. So one might argue is that the good strategy, bad strategy, I do not know, but right now I believe that is the good strategy, at least from the data perspective. Okay.
So I will quickly explain what I do here, right? So suppose if you go to, let's say, uh, TradingView indicator, and I am in the one week, um, one week window here, and then there is a below, you can see RSI. Okay. And these are the only two things that we need. You can see RSI here, and then in RSI, uh, what I did was I did, um, okay, you changed the setting of RSI. Uh, RSI, length I had put 52 weeks, and then the actually put TMA as well, I think, right or wrong, my program right now got the EMA. Okay. So it says 52, 52. So one might argue why 52, why not 40? Absolutely. They can put whatever the number. What you are doing that you are showing, but people can try. People can try. Absolutely. Again, these things, right, there is no right or wrong thing. Maybe 52 works for some weeks. After some time, maybe 100 might work. They have to keep experimenting on this. That's what I said, starting of the conversation. Correct. As a trader, investor, we can't really trust what happened, uh, five years ago, right? It's going to work tomorrow because we're all evolving every few months. Correct. So same thing with the stock market. Okay.
So now, uh, very simplistic strategy. Suppose somebody wants to do momentum. Whenever the RSI line is above the moving average, they'll go and then buy the ETF. Okay. So whenever they wanted to do the contra strategy, this is the place they would buy the ETF. So this is basically RSI is below the moving average. So sir, if, if anyone following momentum, then he will buy when the RSI crossing moving average. That's right. And he will sell when RSI crossing down to moving average. Absolutely. And if someone want to follow contraing down, RSI will cross to moving average on the upper side. So, um, here I'm not talking about exit at all. I'm only talking about entry. The reason is, uh, these, um, ETFs are all offered as a mutual funds, right? Okay. There is an exit load. So I do not want that to happen. Okay. So for instance, whatever ETFs that I buy, I would wait for 12 months. Okay. I would not exit immediately, even though they are actually getting into losses if I'm in the momentum. Same with contra. Suppose in contra, I bought some funds and then they're going up. I will not exit. I'll wait for 12 months. A lot of times I do, I do wait for 24 months as well, so that you will not really get into. But, um, so how do you earn money, right? So suppose between the 12 month, so what is the exit then? See, generally my philosophy is, um, uh, I'm, most of the stocks I do not exit. The reason is I do not need money from the stocks. Correct. So if I need some money, anyway, I will exit whatever it is. So that is respect of the profits that I make. So in this strategy, I will not exit. Okay. You got it right. So in this strategy, I will not exit. But if I need money, you will exit. I will exit anyway. I have to close the shop and then do it. Okay. But when you, when you're talking about the strategy, we will not exit the strategy. That's you not exit any stocks.
Okay. This is a quick example of how these things would work. So, um, I picked up 2019, but let's see recent days. We'll pick up 2023 and in the June 1st onwards. Okay. So we have a bunch of ETFs here, and, uh, what I'll do is, uh, this is the same strategy. We got the 52 weeks RSA here, and then we have the, uh, again, 52 weeks moving average, exponential moving average, moving average. And then I want to invest only into top five active ETFs that point of time. Okay. So here I have two stat, two ways to do that, as I said, here earlier. So I have the momentum or I have the contra. Okay. So momentum is basically whenever the RSI goes above the moving EMA, I would buy and then hold. I'm not talking about the exit strategy right now. I'll talk about the exit little later. And then let's say that week we have the active. For instance, if you go and then come here, it says for this week, the active momentum, ETFs, right, in this week. Okay. And then I'll simply go and then execute this trades on Monday morning. Okay. Okay. Monday morning, whatever it is, whatever the time it is. Yeah. So this is one strategy where you would keep on, let's say next week, probably one of these things will go off and then one more might join. Okay. So this is the way the rebalance will happen. Uh, so now let's say, just for the example, right? Okay. We will run this code again to the next week, same, uh, maybe on Saturday. Agree. No, Monday morning. I, yeah, Monday morning, let's say next week, if I run, Junior BE might go off and then probably Nifty might join here. Correct. So that point of time, I will not exit Junior BE, but I'll not invest into Junior BE. That's right.
So now, let's, uh, change the, uh, flip it a little bit and then see what happens. Right now, I'm doing momentum. Let's say if I did the contra. Okay. Now my returns have increased drastically. So it's basically, uh, what happens, right? So now I'm not actually buying. Correct. When it is going up. I'm actually buying when it is falling down, right? So, and then when it is falling down, I'm accumulating more ETFs. But eventually, the S&P's ETFs themselves get rebalanced automatically. So, for example, let's say if you have the Nifty 50, for instance, Nifty 50 gets rebalanced. You'll only get the best performing stocks there. Or even let's take Pharma. That gets rebalanced. So now, because there is a rebalance already, and then eventually the sectors would automatically go up. But then would there be a sector that would perpetually go down? Like media? Um, yeah, media, right now, probably it is not doing quite good, right? So then those are all the calls that we need to take. And that is the reason we are not investing into one ETFs, right? So we are, we are, in the like, we are making portfolio of, yeah, at the end of the year, maybe we will put money into 10 to 15 different ETFs. Out of this 10 to 15, maybe two, three might still give us loss, but then the remaining, uh, 12, remaining 12 or 13, they'll give profit. That's that is the concept. Now, what you are doing is you are, you are trying to buy when the ETF is at the lower price, and then assuming that it's going to really come back. As you can see with the data, data actually says that the contra is working very well as of now. Correct. So this is one good bit. I started doing this in last couple of weeks and so far it's going on well. Maybe, maybe one or two years down the line, if we meet again, probably we'll see how the performance has. The reason I also do not want to, uh, completely depend on the backtest. Backtest sometimes gives good results. Reality, it won't be right. So, but then right now, I'm start investing money exactly using the same concept. Okay. Each week I do approximately about a lakh. And then, and then see how it goes. So let's see after some time, we'll when we catch up, we'll definitely understand how to put.
So this method, we can follow on equity, uh, stocks also? 100%. You can definitely follow. But which stock we should follow? Because some stocks are, if we follow contra, uh, strategy, they may not come back. Yeah, they will not come back. We'll have to generally, if at all somebody has to do this strategy into the stocks, it got Nifty. Okay. So not below that, because below that, what would happen, the stock or the company can be sometimes Nifty and now it is not part of 500. 100%. Okay. Absolutely possible. Yeah. Because I think, so I feel this strategy will work more good in, uh, ETFs. The ETFs. The reason I think it's, you are absolutely right. The reason is ETFs inherently get balanced, right? Even if you do not observe, right? So automatically they get balanced. So background, somebody's working for you to make it, uh, lot more attractive. To make you, right? Huh? 100%. So that's the reason, uh, ETFs are the mutual funds are the best choices. Correct. Not necessarily for the stocks. Stocks. As you said, stocks. Now I will spend some time on, um, what are the best way to pick up the stocks right now, and then we will probably guide that. Right. Okay. So this is clear of the. Yes, sir. This is. So sir, this back, back testing data is from 2023, uh, January, right? That's right. Can we, can we, can we go further like in the past like 2020 or 2019? Absolutely. I just want to see long-term strategy. I will do two things. One thing is I will actually, let's say, go as far as, let's say 20, I think 2019, let's start as you said, and then see how it goes, right? So we'll see how the moment. This is, this is for contra. This is, this is contra. Right. Let's say this is momentum. Yeah. Momentum gives about 23. This is CAGR written, right? C. And the drawdown is 40%. Uh, yeah, the benchmark drawdown is 86%. Okay. Yeah. And then because that is also passed through the co thing, right? So, and now this is contra. Contra is about 22.9 or whatever. Okay. Let's do, let's come to something which is recent. Let's say 2024. So for the long term, I think contra and momentum has not similar, not more difference. Agree. I think that also, I think it's a great point. Right. So in the long term, what happens, uh, the mean reversion would be happens, right? So, so if we do the same thing in 2024, uh, so contra is giving you almost 19%. Yeah. And, yeah, let's see momentum. Yeah, momentum actually given more compared to. So strategy is very interesting. The drawdown is very low. That's right. Yeah. Agree. And the return is actually as good as compared to any good mutual fund. Agree 100%. And the cost is also low here. Very low. Yeah. Agree. Right. And this doesn't require, as I said, too much of an analysis. Right. Somebody. And I don't think ETF deal. No. ETFs will not be ETF. It is ETF. It is index. As I said, somebody in the background working for us to make the ETF successful. So, but in this ETF background company promoter and mutual fund. Agree. So that is the good part in this ETF. Okay. And even you are using this investment for your option trading. So that is very good. But last question, what is your appro CAGR coming? So, uh, until 2024, it's approximately 40 to 40 around that. But then 2024, I had, uh, definitely some losses. But I think last year picked up again quite well. So, so I think right now it's not 40. Right now, I think it comes to about 26 or 27. Not calculated this year. But this year has been quite good. So verified financial year. Sure. Sure. So Twitter, I stopped posting because of various reasons. Funnier note, a lot of people start asking money. So that's the reason I stopped. But I think I'll show, because this is, um, this is a commodity, and then, uh, I will also show. This is this year commodity. This year commodity. Almost I had, by the way, I had loss on Friday on the silver. But, but how much capital you have put for this commodity? In this, uh, overall in this account, there is, uh, approximately about 3. Okay. And this is the equity as of now. This is future and option. Uh, this is, uh, this is basically the stocks and indices. And then the, the previous one is commodity. Commodity. That's. So almost 50 lakh rupees. Uh, around that. This financial year. Yeah. Yeah. I think around this is good return. About 16% about approximately 5%. Right. So with, I mean, this also I did, uh, lot of mistakes. So, uh, lot of mistakes are basically, u when I break the rules. I know that I should not. But then what happens when you, as I said, when you get lot of positive days, right, so some days you want to take risk. But I think I also feel, uh, trading otherwise, it will become very boring. If every, I'm not suggesting that you should not get into losses, but then, um, if it is too predictable, right, you want to do some experiments. So those experiments sometimes they work, sometimes they will not work. Okay. So I'm okay to experiment to some extent, uh, to the extent of, uh, not getting into deep losses. But I think some experimentation gives us, uh, some more new, new clues on what we can do in future. So that way, I think I would take some of the losses as a more of an investment for the future. M. So for instance, very recently, I invest, I did a contra trade on HCL when it fell down, but then the trade did not work well. HCL Tech, right? So during the results, it fell down by 10, 8%. Again, my model said that it's going to recover. While I did the protection thing on the bottom, but then some point of time, I had put lot of money on the contra. That gave me some good losses. But then the same strategy that applied next month, it gave back pretty much all the losses. Correct. So I think these experiments are part of life because if you try to not do experiment, we do not know what the future is going to offer, right? So we'll not be able to really do anything. So that's all right. Right, sir. Thank you. Thank you for the full knowledgeable session. Platform. Uh, right now, no, I right now do not want to make it commercialized. But I think my view, these things can be built by anybody with the current and other things. So like that's so basically platform. And that's why podcasters in one, right? But I think, okay, thank you, sir. Thank you. And thank follow YouTube channel, right? But you can, you can follow on Twitter. But I will say 100% because. So once again, sir, and thank you. Thank you so much, Vijay. I enjoyed the conversation also. Obviously, beautiful Mumbai. So, so far so good. Thank you, sir. Thank you.