Options used to be close to irrelevant for bitcoin's price.

Until now.

At current price levels, hedging large option notionals has a major impact on price.

Here's a quick thread on options 👇

Let's start with the meaning of delta.

Delta is the rate of change of an option's price relative to a change in the price of its underlying.

For example, the price of a 50 delta option will move 50% as much as the underlying.

For practical purposes, think of it as how much of the underlying you have:

- if long 50 delta call on 1 BTC => long 0.5 BTC
- if long 50 delta put on 1 BTC => short 0.5 BTC
- if short 50 delta call on 1 BTC => short 0.5 BTC
- if short 50 delta put on 1 BTC => long 0.5 BTC

An option where the option's strike (i.e. exercise price) is equal to current spot price is known as an at-the-money option (ATM). ATM options have a delta of 50, while deep in the money options have a delta of close to 100.

Can also think of delta as probability. A 50 delta option has a 50% chance of expiring in the money.

For a call, the higher price goes => the more in the money the call => the higher the delta.

Once delta gets close to 100, odds are ~100% the option will expire in the money.

1/6 As part of @_surgeahead, I recently ran a workshop for 40 #founders about metrics . Numbers. It was 16 years ago when I learned about the importance of numbers from Napoleon.

2/6 Or, really, from a Dutch guy who reminded me of Napoleon. Small guy. Man of few words. But he owned the room. Oh, and he was CEO of a company with billions in revenue and over 100,000 employees across the world.

3/6 A colleague was presenting to a group of 5 that included me and that CEO. The presentation sounded like this:

- “Things are going well.”
- “We’re really proud of our team. They’re very passionate.”
- “Performance is incredibly strong this year.”

4/6 Napoleon was silent. Said nothing throughout. But in the end, he stood up and said:

“The language of business is numbers. The language of business is finance. If you don’t give me ONE number out of every TEN words, you are not talking business.”

Then he left.

5/6 I never forgot that. I realised I spoke 6 languages but didn’t speak numbers. Couldn’t speak finance. And business is all about numbers. ONE out of every TEN.

Keynotes from @jackbutcher talks on "Marketing Lessons " with @david_perell.

"Build once, Sell twice."

How to create a online presence using the Internet to communicate and connect with the idea?

Why is coining language so important in brand packaging?

" The world doesn't reward the people who have ideas but reward the people who are best at communicating their ideas." @david_perell

One of the most important marketing lessons is to understand the power of coining terms and language.

1// Coining terms means coining the ideas, the path that let other people remember, share and make sense of the world.
Creating ideas is a means of building a profitable business that remains in people's mind.

2//. " People grow your brand as a result of sharing your language."
Coining language enables the spread of an idea which increases the market for a brand.
To market a brand learn how to communicate the idea.

3//. The words used to promote a brand is a description of the idea.
"The name of the brand itself is a way to explain the service." @visualizevalue
To communicate through language, we must understand how can we phrase an idea in the minds of people.

Few days back, I shared my investment thesis for ITC.

Today, I want to share the detailed presentation.

Focus is on explaining & analyzing the ITC 'business' and not the divided opinions about its 'stock price'.

Thread 👇

@finbloggers @dmuthuk @FinMedium @ITCCorpCom

1/ Financial Performance

- Decent overall growth.
- Weak revenue growth in recent years.
- PAT growth > EBIT growth > revenue growth.

2/ Financial Position

- NCA have almost tripled.
- Equity has almost quadrupled.
- Negligible debt / insignificant liabilities.

3/ Cash Management

- CFO growth < PAT growth.
- CFO enough to cover both re-investments & dividend.
- Consistent re-investment & increasing shareholder payouts.

4/ Key Metrics

- ROCE/ROE near minimum but still healthy.
- Margins at decade highs.
- Asset utilizations at decade lows.
- Comfortable solvency, minimal leverage.
- Strong cash conversion.

For the ones who are in their 20s. My key takeaways from @warikoo 's session at the E-Summit 21 by @ECell_IITR, moderated by our very own @nipunnyy : (A 🧵)
1. Two habits which you would like people in their 20s to inculcate:

> Read every single day
> Reach out to people you don’t know personally (having both is a deadly combo!)
2. Mistakes you made in college:
> Did not listen to my own self while I was in college and still continued what I was doing. Went all the way to do PhD in the U.S.

Realised I was not happy.
>Had a moralistic view of the world. (Who you should hang out with and who you should not. Eg- people who drink, smoke etc, are bad But, that is not it. So, don’t judge people on that basis.)
3. Things this generation is not being able to see now

(because of which they are unhappy):
> Instant gratification- way of thinking. Lack of realisation of the fact that good things do not come easy and fast.
4. What are the right reasons to do Entrepreneurship:
The market doesn’t care about where you’ve been, what you’ve done.

All that it cares about is whether you are creating products which the people will love. Drop your ego/irrational optimism and see what the world is like. The right reasons are:
>Intense commitment to problem solving. Should be naturally embedded in your personality.

Solid session on 🇮🇳 by @balajis and @naval via @joinClubhouse

Key takeaways... 👇

1/ India will be the biggest beneficiary of the move to #remotework. Three factors driving this: the English-savvy population, willingness for companies out West to hire from a global talent pool, and the large STEM-educated workforce.

2/ India has the potential to become a media superpower. We have Bollywood, the massive audience, the content creators. They foresee India churning out media that isn't uniquely Indian, but one that resonates with global audiences.

3/ The government isn't doing foreign investors any favors with the stringent capital controls they've put in place. Additional capital gain taxes, overbearing KYC controls, and cumbersome paperwork are a few factors dissuading foreign capital from entering Indian markets.

4/ Where you choose to live, incorporate your company, and target your audience could be thought out and optimized for. They don't need to all be in the same region anymore. The world is flatter than ever before.

On this auspicious day of #GuruPurnima, happy to share an easy to read and an exceptionally worthwhile investment. I plan to make a thread that will hopefully help us invest and live better. Thank you @awealthofcs 🙏🏻

Experience has taught me that less is always more when making investment decisions. Simplicity trumps complexity. Conventional gives you much better odds than exotic. A long-term process is more important than short-term outcomes.

And perspective goes much further than tactics. Tactics are useless to investors in a matter of days—sometimes in a matter of hours. But perspective is something that stays with the investor for a lifetime. It allows you to adapt to the changing market and economic landscape.

While keeping it simple won’t make it any easier to predict the future—no one has a crystal ball—it can give you the necessary capacity to make rational decisions, no matter what happens next.

Perspective is so important because, without it, even the most intelligent of investors can be ruined from a lack of self-awareness in their own abilities. Investors that fail to put the news or market moves into the proper context....[1/2]

Model Portfolio 3

Time Horizon 3 years or earlier ~ Depends on if the stock performs significantly well in faster time. Review of business performance important every quarter.

This portfolio is suitable for aggressive investors who believe in risk taking and look for growth

Name %allocation

~ Laurus Labs 15%
~ Balaji Amines 15%
~ Deepak Nitrite 15%
~ Kopran 10%
~ Pokarna 10%
~ Eveready 10%
~ Dynpro 10%
~ Manorama 5%
~ Adani Enterprises 5%
~ SHIL 5%

~ Laurus Labs
~ Kopran

My top two picks in pharma sector are Laurus Lab and Kopran.

These have good earnings predictability, growth visibility & significant undervaluation. Growing from small to medium and to big.

Earnings can grow and valuations multiple can grow accordingly.

~ Balaji Amines
~ Deepak Nitrite
~ Dynpro

These three are my top picks in Chemicals.

These have good earnings predictability, growth visibility & significant undervaluation. Growing from small to medium and to big.

Earnings can grow and valuations multiple can grow accordingly

~ Pokarna
~ Eveready
~ SHIL

These three are my top picks in Home Consumption.

These have good earnings predictability, growth visibility & significant undervaluation. Growing from small to medium and to big.

Earnings can grow and valuations multiple can grow accordingly.

0/ Predictions for 2021:
(This is not investment advice, or any other type of advice. DYOR)

1/ #ETH hits new ATH(s).

2/ #Bitcoin breaks $55K; but BTC YE2021 close is < $30K.
wins!

3/ > 3 billion-dollar crypto IPOs successfully occur (eg CoinBase, BlockFi, et al).

4/ @SBF_Alameda’s ‘off-chain BTC folding’ strategy goes unnoticed; whole crypto ecosystem wins!

1/ We often misunderstand new technologies because they don’t neatly fit into to our world…yet

They enable us to do things we previously couldn't.
They change our behaviour.

#Bitcoin is one such example.

And looking at how it’s currently used gives us a peek into our future.

2/ INFLATION HEDGE:

"Bitcoin’s ultra-orthodox monetary policy of targeting a fixed money supply, is the ideal hedge for fiat money printing."
- @pierre_rochard

3/ MONETIZATION OF STRANDED ENERGY:

“If your local energy cost is effectively zero but you cannot sell your energy anywhere, the existence of a global buyer for energy is a godsend.”
- @nic__carter

4/ UNCORRELATED ALPHA:

"One reason the interest in #bitcoin from Wall St as well as pensions and endowments is this is uncorrelated alpha, this is the holy grail of investing.”
- @Sonnenshein

5/ MICROPAYMENTS:

"Bitcoin uniquely has a native unit of account called a "sat" that currently represents 1/100 of a cent (while BTC is $10k). The brand of "sats" ...could already be the most recognizable global unit of account to represent value <1cent."
- @cuysheffield

The most effective meme I’ve found for Ethereum is “Digital Economy”

From there it’s easy to layout how Ethereum is the foundation for a variety of digital institutions (protocols) built upon the same principles of decentralization as Bitcoin.

1/

With “Bitcoin : Digital Gold :: Ethereum : Digital Economy” as the framing its then much easier to describe what a bet on ETH is.

I first explain DeFi (the new Wall Street), NFTs, Web3, and all the other mind blowing projects built on Ethereum...

...then illuminate how ETH is at the center of all it.

If BTC is like gold - an asset that people store value in but don’t use as money.

Then ETH is like money - the most liquid asset in Ethereum’s on-chain economy that is demanded for a wide range of economic uses.

If I get pressed on the semantics of “money” I explain how ETH is used as a medium of exchange, store of value, and unit of account...

...but also eventually as the ultimate source of security for the Ethereum blockchain, stretching the idea of what money is.

A lot these ideas are what we attempted to express and put numbers behind in our latest ETH 2.0

" ALL ABOUT HEAD & SHOULDER CHART PATTERN"
~ This pattern is analogous to the human upper body
structure.
~ Credibility of this pattern is really high.
~ It consist of 3 types-
1. Head & Shoulder Top
2. Head & Shoulder Bottom
3. Head & Shoulder Continuation

1. Head & Shoulder Top:

~ It is used to take the bearish trade. While taking trade on the basis of this pattern. The prior trend should be an upward trend before the formation of this pattern takes place.

~ Risk to Reward ratio is high.

~ If we goes wrong SL will hit.

2. Head & Shoulder Bottom

~ It is also known as Inverted Head & Shoulder pattern. It is one of my favourite pattern. It is used to take bullish trade.

~ Prior trend should be downtrend or sideways before this pattern formation takes place.

3. Head & Shoulder Continuation

~ Prior trend should be an upward trend before the formation of this pattern takes place.

~ Risk to reward ratio is high.

~Stop Loss should be on the closing basis.

I cannot believe this content is free.

My notes from @Arthur_0x and @zhusu's podcast. Great catch up on everything going on in DeFi.

PS - This is extremely niche so please feel free to skip if you're not interested in

TLDR:

1. Build for UI/UX; not solely for technology/economics. They’re more important than you’d expect. See Balancer.

2. Involve community. They’ll do more than you’d expect. See Sushi.

3. Creative governance solutions & long term orientation will win. See SNX

Part 1: Decentralized Exchanges

$UNI (Uniswap)

$SUSHI (Sushiswap)

$ZRX (0x)

A thread on Trend-lines

// What are trend-lines?

Trend-lines are support and resistance lines which are formed by connecting Important swing points.

The beauty of using them is that We can use them when stock is not Respecting the Horizontal S&R zones, they can indicate us when the trend may change.

// Things To consider while Making trendlines?

• A trendline formed by using 3 Major-Swing points is a potential trendline, But we will also use 2 points to form a trendline, will discuss how, as you read further.

• Trendline can be formed by two ways-

1. Wicks-

In this method we only connect the wicks to make a trendline, this is a precise way of making a trendline.

// Why only connect the wicks?

There are two type of levels - Precise and Less precise (Which we call zones).

So what we are doing is by only connecting the wicks we are making a precise level where we can take trades, either Mean reversion or Breakout trades.

Examples-

1/ Lessons From The Tech Bubble:

Last year, I spent my winter holiday reading hundreds of pages of equity research from the 1999/2000 era, to try to understand what it was like investing during the bubble

A few people recently asked me for my takeaways. Here they are -

2/ Every document hereon comes from my former employer Bernstein Research's internal research archive, which extend back to 1994

Unfortunately, they're not available to the public (even Bernstein's client website cuts off at 2003), but happy to give more details if necessary

3/ LESSON #1: Everybody knew it was a bubble

Unfortunately, the quip "it's not a bubble if everyone says it is" just isn't true

Investors were comparing the internet sector to tulip mania as early as mid-98. Bernstein held an entire conference on it in June 99!

4/ LESSON #2: Calling bubbles is easy, making money is hard

In truth, the hard part about the tech bubble wasn't noticing it. The hard part was timing it

Our equity strategist tried in January 99... he was off by 14 months (and another 30 point gap in value vs growth)

5/ LESSON #3: Nobody knew the bubble popped until months after it did

Nobody noticed in March 2000 when it finally popped. Our equity strategist (who bet his career on it!) didn't catch on until June

THREAD ON DELTA (The most important GREEK)

Many traders don't indulge in understanding GREEKS because they think they are very complicated.

There are 4 primary greeks:

Delta
Gamma
Theta
Vega

In my experience, understanding DELTA is enough to take benefit of greeks.(1/n)

Delta measures the rate of change of options price based on the directional movement of the underlying.

So this means we can know in advance (theoretically) how much an option will move with the underlying & so we can prepare our strategies accordingly. (2/n)

Value of delta varies between 0 & 1 for calls and -1 & 0 for puts. This figure tells how much an option price will change, when the underlying moves 1 point. So example a delta of .2 of call indicates that for every 1 point change in the underlying, the price will move .2 (3/n)

For option writers who want to trade in neutral strategies like straddle, strangle, ratios, calendar etc, delta can be very helpful. So be it any complex strategy, knowing the NET DELTA can give you an idea of how your strategy will perform in different scenarios. (4/n)

Net delta is just the sum of the deltas of all the bull options (call+ & put-) minus the bear options (call- & put+).

So if we can track this, we will always be in the know of how much exposed our position is. It makes it easier then to adjust our position. (5/n)