Stock market Tech startup Sinoca Options is helping traders make informed decisions

 

Stock market Tech startup Sinoca Options is helping traders make informed decisions

Stock market is one such place where people do not require any pre-requisite certification or college degree to enter. So, a lot of people enter this arena and unfortunately, with a mindset of gambling or a “get rich quick” method. And, sooner or later, almost all retail traders end up losing their trading capital. This change in mindset is more important than any other skillset to consistently make decent returns from the stock market. The second-most important skill in trading is the understanding and application of statistics and probability. Many new traders try to trade on the basis of news or quarterly results of companies and fail miserably over the long run because as retail traders, the access to information is never the first and by the time a news is published, the market would have reacted to it already. 

Knowing how to read a balance sheet and indulging in complex financial analysis is the task of an investor who is looking for long term wealth preservation. Being a trader means targeting for consistent monthly cash flows. Them, like most traders out there, did not have a large enough capital to have decent monthly returns from investments when they began. And so they decided to take benefits of the leveraged products in the Derivatives segment to increase their net returns.

(Pic: Founders of Sinoca Options)

Since the last 2 years, they, at Sinoca Options, have been able to generate 4-5% monthly returns by writing weekly Option contracts of Nifty index on the expiry day. So, they trade only on Thursdays (which is the weekly expiry day) and with just that one trade setup, they have been able to generate consistent monthly profits. On their Instagram page, people can see all their trade P&L since the day they started trading. On each Thursday evening, they post their results on the page - be that a loss or a gain. This level of transparency has enabled them to attract a lot of clients with a sizable capital. The average ticket size of their client is Rs 10 lacs and currently they have 25 clients with them. 

Since Option writing requires a higher margin, the capital requirement for this trade setup is minimum 3 lacs. Initially, a lot of people ask them- “what if the worst to worst happens and I lose all my capital on the first day?” This concern is coming out from personal experiences as well as the stories that they have read about other people losing all the capital because there were no risk management frameworks. In intraday trading with high leverage, using Stop Loss is a MUST. They always trade with a stop loss, no matter how confident they are in their analysis and recommend others to do the same to preserve their hard earned money. In the market, “return of capital” is more important than “return on capital”. So for them, even in the worst case scenario, the maximum loss is capped at 2.5% of overall trading capital. They offer the training service as well as portfolio management. One characteristic that differentiates them from other trainers in India is that they provide live support to everyone that they have coached. Theoretically talking about a trade setup and showing examples of past data is important but it is equally important to assist the new traders in their trade execution. They themselves have spent lacs in learning from trading gurus around the world and always missed such kind of support during live trading. They are now trying to fill that gap in Sinoca Options. Going forward, They plan to reach out to new traders who do not have access to large capital and for that they have launched a new service - Equity Seasonality report. They have done extensive data analysis of stock price variation during particular periods of months from past 20 years of data on NIFTY 100 stocks and identified certain intervals where the share price has rallied more than 5% with greater than 80% accuracy. Here is one insight that came from the Seasonality analysis - JSW Steel has given an average return of 5.4% from 1st Apr to 28th Apr in the past 13 out of 15 years. They analyze the data for such patterns and then take the trade in the Equity or Derivatives segment. Every month, they identify such trades and then help their clients in generating profits by specifying the exact entry and exit price in equity, Futures and Options segment.

Website: www.sinocaoptions.com

Instagram : www.instagram.com/sinoca_options/