Blog

17.1 – Commodity options, finally! My first commodity trade was on pepper futures, and this was sometime towards the end of 2005 or early 2006. Since then, I’ve closely tracked the developments of ..

12.1 –Defining Equity Capital The last chapter we laid down few key thoughts on position sizing and with that, I guess it is amply clear as to why one has to incorporate position sizing at the core ..

11.1 – Poker face Last month I got an opportunity to play poker with a few good friends. I was playing poker after a gap of 6 years and I was quite excited about it. The buy-in for this friendly gam ..

10.1 – Black Monday Let’s start this chapter with a flashback. For many of us, when we think of the 70’s, we can mostly relate to all the great rock and roll music being produced from across the ..

9.1 – Working with the weights In the previous chapter we introduced the concept of portfolio optimization using excel’s solver tool. We will build on the same concept in this chapter and proceed ..

8.1 – A tale of 2 stocks We have spent a great deal of time and efforts towards understanding risk associated with a portfolio. Our discussion has brought us to a very important stage – it’s tim ..

7.1 – Expected returns The next two chapter will be very insightful, especially for people who have never been familiar with portfolio techniques. We will venture into the realms of expected return ..

6.1 – Overview This is off topic – but a little digression hurts no one, I guess. Of all the chapters I have written in Varsity, I guess this one will be a very special one for me. Not because of ..

5.1 – Correlation Matrix In the previous chapter, we successfully calculated the variance-covariance matrix. As we discussed, these numbers are too small for us to make any sense. Hence, as a practi ..

4.1 – A quick recap Let us begin this chapter with a quick recap of our discussion so far. We started this module with a discussion on the two kinds of risk a market participant is exposed to, when ..