Comment on 10th Std Pass, Market Wizard from Thrissur

Guruprasad Maiti commented on 25 Aug 2016, 06:08 AM

Dear Nithin,

Since you are giving Mr. Joby a prestigious title of MARKET WIZARD, and a special place in your hall of fame of most successful traders I can not stop myself of raising few points over the statements made in the above interview.

1) He as a rule completely avoid writing naked put option. being mainly an option writer then he writes naked call option. but how does writing call option has advantage over writing put, especially when market is rangebound? Theoretically, in writing put, loss is limited to stock going to zero value, but there is no limit to loss in writing call. referring short strangle(naked put writing involved here braking his own rule) as hedging is inconsistent with his intelligence of being able to recall nifty closing price for last 10 years.

2)More importantly, how does his profit run into crores if he has made everything out of 500 hundred rupees starting capital? mathematically 100% return on his trading capital every year in last 22 years turns it into 105 crores only, but considering he only uses 1-3% of his net worth (he takes profit out of trading to invest in other business) it runs into mathematical impossibility with only 100% return every year. But then how is it possible to make more than 100% return every year writing option in rangebound market (possible out of range otm options ) where nifty has rarely been so in monthly basis from the year 2000, in fact it has mostly been sharp bull or bear market.

He might be a Market wizard and his winning from market might as well run into crores, but writing option in rangebound market(after patiently waiting) does not seems to be mainly what he does.

So why should stated method of Wizard of Market be so insubstantial? this puts a dubious question mark on intention of Zerodha by putting his interview without properly reviewing it.


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