Options trading
Recently I have been dabbling myself in options trading. I therefore decided to share my knowledge of what I have been reading all along

There are 2 types of options trading

• calls
• Puts

1. Both of these options give the buy of this option the right to buy or sell stock at the strike price on expiration date but NOT the obligation.
2. Each option contract is of 100 dollars size.
3. Options expire on the 3rd friday of each month.
4. Options are easier to work with if your account size is smaller.
5. Options tend to be complicated and requires understanding and lots of virtual trading before you can consider yourself ready to trade options.
6. Call prices go up when the underlying stock goes up. Example would be option prices go up > 50 cent if In-the-money. option prices tend to go up upto 50 cents At-the-money and option prices tend to increase less than 50 cents for Out of the money.
7. The same logic applies for puts except, the put prices go up as the stock prices go down.
8. Option prices also tend lose their time value at passage of time. At the money and out of money calls/puts expire worthless and in-the-money options expire at intrinsic value on the the date of expiration.
9. Therefore you always need to play ball with time decay and price change of the underlying.
10. Trading tricks to apply
    If you expect stock to go up
    Starting trade -Buy a long call preferably a in the money or at the money (BTO=Buy to Open)
    Stop Loss - You have to guard yourself against movement of stock downwards. If the underlying stock goes down then options price would go down. Therefore if you purchased original option for 5 dollars (500 dollars + commision) for entire purchase. Place your stop loss at 3.5 - 4.0 dollar
    Exit - You can exit any value above the purchase price. At expiration if the stock is exercised (ie the stock price > strike price of the call), the stock would be assigned to you. Make sure you have enough money in the account to exercise the options. Also if you do not pay attention to time decay you may potentially end up in a loss.
    Remember: The stock has a time value even a minute before expiration but can lose all that at expiration.
    
    If you expect stock to go down
    Starting trade -Buy a put preferably a in the money or at the money (BTO=Buy to Open).
    With a PUT you have to think opposite. With fall in stock price the value of a Put goes UP!!!
    Stop Loss - You have to guard yourself against movement of stock upwards. If the underlying stock goes down up, options price would go down. Therefore if you purchased original option for 5 dollars (500 dollars + commision) for entire purchase. Place your stop loss at 3.5 - 4.0 dollar
    Exit - You can exit any value above the purchase price. At expiration if the stock is exercised (ie the stock price <>

There are other trading tricks like doing bull call spreads, bear put spreads and covered calling. It is better to read books published by CBOE for a better understanding.

P = principal, the initial amount of the loan
I = the annual interest rate (from 1 to 100 percent)
L = length, the length (in years) of the loan, or at least the length over which the loan is amortized.
The following assumes a typical conventional loan where the interest is compounded monthly. Define two more variables to make the calculations easier:
J = monthly interest in decimal form = I / (12 x 100)
N = number of months over which loan is amortized = L x 12
Okay now for the big monthly payment (M) formula, it is:

J
M = P x ------------------------
1 - ( 1 + J ) ^ -N
where 1 is the number one (it does not appear too clearly on some browsers)
So to calculate it, you would first calculate 1 + J then take that to the -N (minus N) power, subtract that from the number 1. Now take the inverse of that (if you have a 1/X button on your calculator push that). Then multiply the result times J and then times P. Sorry, for the long way of explaining it, but I just wanted to be clear for everybody.
The one-liner for a program would be (adjust for your favorite language): M = P * ( J / (1 - (1 + J) ** -N))
So now you should be able to calculate the monthly payment, M. To calculate the amortization table you need to do some iteration (i.e. a simple loop). I will tell you the simple steps :
Step 1: Calculate H = P x J, this is your current monthly interest
Step 2: Calculate C = M - H, this is your monthly payment minus your monthly interest, so it is the amount of principal you pay for that month
Step 3: Calculate Q = P - C, this is the new balance of your principal of your loan.
Step 4: Set P equal to Q and go back to Step 1: You thus loop around until the value Q (and hence P) goes to zero.

Brazil and India World Cup parallels

In the 2006 Soccer World Cup, defending champions Brazil exited in the Quarter-finals losing to eventual finalists -France. Before the world cup began, the media and the pundits were already crowning the Brazilians as champions for the record sixth time. They did have players who had experience and multiple "world player of the year" in their ranks like - Ronaldinho, Ronaldo and emerging stars like Kaka and ageing stars like Cafu and Roberto Carlos. They therefore had the right ingrediants for success but were eventually beaten by a team that played more with passion and creativity. If you tried to analyze the reasons why Brazil failed to win, it can be safely said that they lacked creativity and passion in their play. They never made anything special happen on the field. You cannot hold age against the brazilians because they were beaten by an even older team - France. Brazil had after all the right mix of youth and experience.
The passion for the game is tremendous in Brazil, just like the passion for cricket in India. Remember this -"It‘s a hard moment for us," offered head coach Carlos Alberto Parreira. "It‘s very hard when a Brazil squad is beaten in the quarterfinals. I wasn‘t prepared - no one was prepared to leave. No one thought we‘d leave before the finals." Famous last words.
The media had this to say about Brazilian playersThe defenders Roberto Carlos and Cafu were too old, and that Ronaldo was too fat, Adriano too slow and Ronaldinho too timid on the World Cup stage. And that Parreira was too powerless or too stubborn to do anything about it
Parreira, certainly, will swallow a huge portion of the blame. He named his starting lineup a month before the tournament, and it was based less on recent form than lifetime achievement. Adriano was struggling with Italian club Inter Milan. Cafu was coming off knee surgery. Roberto Carlos hadn't played defense in years. Ronaldo was out of shape and out of sorts.
Didn't matter. They all started.
Now you go make the judgement on Indian cricket.

Abhiwarya's Swayamwar

-From Our Bollywood correspondent

Abhishek Bachchan, the first family's sole heir to the Bollywood throne was sitting on his throne (The Commode) and taking a dump and he thought about all those great moments he has enjoyed with Karisma/Dipannita/Rani/x/y/Aishwarya. Looking at all the choices in front of him, he came to the conclusion that Aishwarya is probably the best deal.

Looking at his movie career, he probably thought that luck was on his side and his Guru would probably be his singular sole hero-hit. Better business sense means, you ask for what you want when things are going your way. After all he has prayed openly across the country for upturn in his movie career and silently prayed for his family to consent upon his marriage choice - "Aishu".

Eventually even Mr and Mrs Bachchan senior were suckered into agreement. They walked 10 kilometers from their home to Sidhivinayak temple. If not for anything else, it was a good exercise.
The Abhishek-Aishwarya marriage christened as "Abhiwarya" has elicited extreme reactions across the country.Here are a few excerpts attached from our readers:-

Excerpt #1

I am stunned and saddened at the responses to the confirmation of Aishwarya Rai and Abhishek Bachchan's engagement. Why can't people shut up about Aishwarya? Yes, she went out with Salman Khan and Viveik Oberoi earlier...so what? Abhishek was engaged to Karisma Kapoor and dated Dipannita Sharma, amongst others. Why don't they talk about his affairs? He's been linked to many women. Most people don't marry the first person they date; why should Aishwarya be an exception? She has the right to be with or not to be with anybody she wants. Aishwarya's past is nobody's business, just like Abhishek's isn't. And, of course, there are the often-repeated comments about her plastic beauty and people actually having the nerve to say she's not good enough for the Bachchans...what the hell? Who are they to decide? Do they know her personally? All these comments just show India's attitude towards women; a woman may not have a past, but a man can do whatever he wants. A woman should not be so good-looking or successful. So much for the emancipation of women. Aishwarya conducts herself with dignity and grace, so she's plastic. She doesn't like talking about her relationships and who can blame her? If this is the way people react, no wonder she keeps quiet. She's probably been cautioned about the vicious and slanderous nature of people's attitudes towards beautiful, successful women. It's really disturbing to see so-called progressive and urban Indians' attitudes towards women. Bravo, India. Bravo.

Excerpt #2

Amitabh Bachchan is on cloud nine after son Abhishek announced that he was marrying Aishwarya Rai, a decision that was hanging fire for more than a year.
Asked when the marriage would take place, Amitabh said: "Not right way. But yes, very shortly. Like every father I'm over the moon, specially at this juncture when Abhishek has delivered such a sledgehammer performance in Guru. "
The wedding is expected to take place in February.
"Amitabh Bachchan is so happy with this alliance that he himself called up a journalist and said, 'Congratulations, Abhishek proposed to Aishwarya and she has accepted'," a source close to the family said.
The engagement on Sunday evening of Bollywood's hottest couple puts at rest all speculation on whether the marriage will happen or not. Close friends feel that their love has withstood the long, rigorous test of time.
Apparently, some family members were initially against the match but finally they also came around.
“Everybody – be it fans, media or family members – were against their marriage because of Aishwarya's flings in the past and the myth that she brings bad omen for her boyfriends. They warned Abhishek 'if you marry her your career will be ruined' and insisted that she is very unlucky.”
"They tried to dissuade him by talking about their age difference (Abhishek is about to turn 31 and Aishwarya is 33) and that she is a manglik (born under a particular astrological configuration that the superstitious believe is not auspicious for the husband). But Abhishek didn't listen to anybody and withstood all the opposition," added the source.
Abhishek's first love story with Karisma Kapoor didn't have a happy ending. Before joining films he was dating the actress and they had got engaged too, but they later broke off over reported interference by Karisma's mother, former actress Babita, who didn't want her daughter to marry the then flop actor.
In 2005, Aishwarya came into his life after her break up with co-star Viveik Oberoi. Before that she had an affair with Salman Khan. Abhishek and Aishwarya appeared as lead couple in Kuch Naa Kaho, Dhaai Akshar Prem Ke, Umrao Jaan and the just-released Guru.
In the first three films, their on-screen chemistry failed to impress and the movies sank without a trace. Thankfully, Guru, released on Friday, is making waves at the box-office.
"They said that Abhishek should go with Rani Mukherji because they make a good couple. Some said that their romance is a mere publicity stunt but the fact of the matter is that they were waiting for a hit. Their marriage talk was going on for quite sometime; it didn't happen in the last few days," said the source.
The engagement took place at Amitabh Bachchan's residence and among those present at the ceremony were Aishwarya's family and industrialist Anil Ambani and his wife, Tina. Close friend Karan Johar was also there. Earlier, the roka ceremony was performed at Aishwarya's house.
Reports had been flying thick and fast for the past few months that an engagement was on the cards, particularly after Aishwarya accompanied Abhishek and his parents to perform rituals at a revered Varanasi temple.
Last February, Amitabh's brother Ajitabh Bachchan had told the media that he went to meet a Bangalore-based astrologer Chandrashekhar Swamy with the horoscopes of Aishwarya and Abhishek. Apparently, Abhishek's octogenarian grandmother Teji Bachchan is keen to see him married.


FAQ about "Abhiwarya" alliance

1. Will Aishwarya act after marriage?
   Highly unlikely in the immediate future. She is already 33. She better go make some babies, otherwise Bacchan Jrs will be childless.
   
2. Will Abhi's popularity stay high after marriage?
   I suppose so, since other actors like Aamir, Shahrukh, Hritik seem to be doing well.
   
3. Will Abhi and Aish kids be beautiful?
   Most probably yes
   
4. Will Salman and Vivek gang up against Abhi?
   Probably improbable.
   
5. Will Amar Singh and Sahara group sponsor the marriage?
   Both will try and sponsor some side deals with the big guys.
   
6. Will Amitabh Bachchan invite Sonia Gandhi for the wedding?
   Yes.Please check with Manmohan Singh for the RSVP.
   
7. What will Aishwarya dress for the wedding?
   Clothes.The last I checked the website. It seems she is wearing a Benaris lehenga
   
8. What will happen if Abhishek's career goes downhill?
   There are a few alternative options for Abhishek
   1.Live off his parents
   2.Ask Aishwarya to return to Bollywood
   3.The Bunt community to which Aishwarya belongs is traditionally good in the Udipi restaurant business and Amitabh is famously associated with Benaras paan. They can definitly have a go in the Udipi Business.
9. We are a religious organization. How do we invite the Bachchan's for religious appearance?
   Bless you for having us in your prayers. Please contact Hon. MP Amar Singh for appointment scheduling.
10. Do the Bachchan's accept invitations from non-Hindu organizations?
    Yes. Mr Amitabh Bachchan did act in Amar Akbar Anthony. That is ample proof of his secular credentials.

World Cup 06

The only sport with a world following - the 2006 Football World Cup is over and we have the new World Champions - Italy. The Azzuries did win the trophy and be crowned for the fourth time. But not convincing. The finals were dominated in play by France for major portions of regulation and extra time. Zinedine Zindane also decided to grab the headlines for head-butting. That the great Zidane failed to control his temper is inexcusable. Sometimes the soccer is not played where the ball is, and Zidane deservedly paid the price.

Pre-tournament favorites

The pre-tournament favorites were Brazil, Argentina, England (probably over-hyped by the
British press), Holland.

Brazil came and played but never imposed their authority on the field. They always seemed to play in the second gear and never really stepped it up. They won mostly because of more experience than their opponents. Ronaldo managed to score 3 goals to break Gerd Mueller's
record but on field he was slow and never really created anything on his own. Brazil were
completly outplayed eventually in the quarter-finals by their nemesis - France and Zidane.
It was pure magic to see Zidane make Ronaldo and Kaka look ordinary. Ronaldinho had a very
ordinary world cup for his lack of creativity on the field. But he is a great individual
talent with exemplary ball skills.

Argentina - The other south american team, played hard running soccer. But somehow their
strategy of attacking in the centre and not using the flanks appeared flawed from the very
beginning. The have good individual players like Riquelme, Rodriguez, Tevez and Messi. They
finally came short against the host nation - Germany in the quarterfinals.The physically
stronger and taller Germans played intelligent soccer against Argentina and both teams never
dominated the contest deservedly decided on penalties.

England - The less said the better. The English press completly raised the profiles of their
super-stars who were mediocre on the field. The Gerrards and the Lampards were off target
almost always and made me respect Ronaldo even more. Ronaldo doesnt create chances but when he gets a chance on goal, he will almost score 8 times out of 10.Wayne Rooney, the sole messiah of the English - made big boast about breaking Ronaldo world cup goal scored record, but instead crushed Portugal player's tomatoes. Out he was thrown from the game. Overall England lacked creativity and good goal scorers. They only progressed as far because of a solid backline and set-pieces.

Holland- Holland seemed to be one of the tournament favorites only because the world cup was
in Europe and other European teams did not offer much promise before the start of the World
Cup. A misfiring attack and lack of a solid mid-field with only Arjen Robben shining.Not a world champion material.

Tournament In Progress Analysis

The Asian teams were a disaster and a little bit behind them were the African Nations.

Ghana was the surprise team however. They played good attacking soccer and they had speed. They were only undone by sheer inexperience.

The Socceroos were a surprise team for the world. I wasnt, really because Australia has a strong sporting culture and they dominate other world sports like rugby,cricket, and swimming.

Germany the host nation, played attacking and intelligent soccer. Their long range attacks
on the goal was the best and their forward pair of Klose and Podolsky combined very well.Klose does have Ronaldo's record to target as motivation for the next world cup.

Klinsmann the German coach was criticized for his american training methods and selection
policies for picking out younger players and ignoring national hero Oliver Kahn. Eventually
he was vindicated and almost appeared god fatherly when he let Kahn have the last game for
the third place finish against Portugal.

Portugal - Deserved the worst fair play team award. Their players dived and fell and tried
all sorts of tricks to unsettle their opponents. Figo and Ronaldo were masterly in this
regard besides their great footballing skills. Did deserve their fourth play finish.

The world cup finalists

France- Written off before the tournament even began for having too many old players, lack of scoring ability. They started very slowly but just as the old wine tastes better, they
got better.

They finally came of the blocks with a win over Togo and then dominated all the
way to the finals. Zidane, Viera and Henry, Makellele,Thuram were outstanding.

Ribery was the star player though. With his tireless runs, he created all those chances for his
team.

And, if you wanted nervous moments if you were rooting for france, they the
unpredictable Barthez did that job very well.

France deserved to be in finals and also win the finals but unfortunately they did not.

Italy-The match fixing scandal in the background and no solid results in the past few world
cups, italy was written off even before the world cup began.

However Italy had great backline and brilliant goalkeeper in Buffon. They ground out results and if you cant score, dont let'em score was their MANTRA.

Skipper Cannavaro was outstanding throughout the world cup. They scored too when it mattered.

Italy had their luck to ride on in their win against Australia. But sometimes luck favors the brave too. They never played the enterprising attacking soccer but it was effective. They did win the trophy as per the rules of the game.

So well done Italy. See you in 4 years.Ciao.

Overall Analysis

• Too many red and yellow cards
• Strategic soccer and less flair. Too controlled by the coaches.
• Asian and African teams continue to struggle.
• Teams are getting experts at diving and rolling on the ground. Team training sessions on
  play acting a MUST.
• NO doping scandal.
• Zidane flawed genius.England- world champions - not in a million years.
• Ronaldo, in the history books and time to retire from International soccer.
  
  
  

Character of a nation
The other day I was having conversation with couple of my friends over brunch about one of my co-workers sister who is of Russian-american origin was in Bangalore on one of her training trips.

She was narrating her experience about contrast in the lifestyle of people in India. On one hand you have towering buildings, beautiful malls, sprawling office complexes, luxury 5 star hotels and then you have dirty roads, littered garbage, poor street children begging for money, half naked men in dhotis ( I assume these were poor uneducated village folks trying to make a living in a big Indian city), pollution, dust.

The conversation slowly veered towards how uncomfortable she felt because suddenly she felt everyone was staring at her on road she was walking on. Well for one she is a curiousity factor in India, a white woman in a BROWN land. I guess what she was unable to fathom was why was everyone staring at her when she is no Hollywood/Bollywood starlet!! People dont stare at you up and down in the US and scan you like a piece of document. Looking is different from staring.

As a result the conversation finally headed towards differences in the life and living conditions in the US and India. Now I just said India is a third world country and even a place like Mumbai has a long way too go. Maybe I have a cynical approach to looking at life.

BAM!!! I am accussed of being unpatriotic and UN-INDIAN. My friends insist that things are happening in India and take a look at all big companies are setting shop in India. I will not deny that fact. But who is is putting all that money in the bowl. US and Europe. Yes they still control the wealth of this world. They can always pull out and go to the next cheapest shop.India and China is viewed as nothing but cheap labor markets. The Atlantic Slave trade that began in the mid 16th century until 1860s involved transporting cheap labor from Africa to work on plantations in the American continents. The only difference is now we have work being done in India and China for almost 1/5th of the costs. The treatment meted out to my co-workers from India is similar too. They get a 41 USD daily allowance for all meals + availing free hotel transport + Motel 6 or Holiday Inn accomodation. Whereas I and my american counterparts get to stay in nicer hotels, 75 USD meal allowance + rental car or transport charges. Now dont we all work for the same company and doesnt every company believe in advertising equal-opportunity employment. The fact of the matter is, this is exploitation. India still has to go a long way to go before it can be considered as an equal partner in any relationship.

I am happy India is awakening economically after 50 years spent experimenting with socialist ideas. But the economic gap in India is always going to be large with wealth concentrated in a small percentage of population while the majority suffer. That small percentage which is a few millions is a large number but a small percentage when compared to India's burgeoning population.The Bollywood glamour, cricket players, rich execs is not the real India, just as Hollywood, pop culture, sex and fornication is not real US either.The real India still lies in the villages and the slums of big indian cities. Thats what I see decides the character of the nation - the "core" people.

When an outsider steps into our international airports, it looks no different from an airport in a third world country in Africa. Thats the first sign of India's real progress.
Similarly take a look at the road systems - the artery of the nation - very poor quality with constant resurfacing after every monsoon. What does that tell you, cheating contractors and local governments. You dont see that in developed world where they have both snow and rain.I have to say I found it amusing when many flyovers projects were started or completed in Bombay, you would see full page ads in newspapers highlighting building of yet another flyover. For godsake, its not an engineering marvel.

Look at the railways, there is always one major accident every year because concept of public life safety is very poor. Sames goes for high number of road accidents. India is probably the only country where you see a traffic police manning a traffic light!!

For getting everything done for approval of new construction to registration of a new business, you need to grease the hands off local authorities. Yes this mostly happens in third world countries, where corruption is bottom up, until developed nations where the corruption is mostly at the top. Corruption is the way of life and people seem to accept that.

Let us just take a look at cleanliness habits, In India your house is nice and clean but do you care how your surrounding is. The garbage is overflowing and littered on the streets. People spit on the streets, throw things around. I am not talking about poor uneducated people, general people behavior.

Lets dig a little bit into our national politics, when LK Advani ran for elections against Rajesh Khanna, Advani barely maanged to win the Gandhinagar seat by 1500 votes. Now LK Advani is a national leader and has done lot for the country and he understands social and national issues, but it was a reality check for Advani.Govinda manages to win elections against Ram Nayak.Amitabh Bacchhan has to do his Rang Barse sequence or utter a few dialogues from his super hit movies at a political rally to get votes for the Samajwadi Party. I have nothing against bollywood, I love those stars but people do not see the difference between an entertainer and a politician who works for the people. You just need to judge the people by the elected officials they elect.

Look at our national monuments, how many of them are in outstanding state compared to ancient castles you see in Europe. I know there are few good ones in State of Rajasthan or Mysore Palace in Karnataka. But those are exceptions and handful to count.

Indians have always been exceptional individuals but we fall apart as team players because of one-upmanship.

Not everything is bad in India. My intention is never to berate my fellow country men and women but put forward my opinion that if someone says India is Shining....Well no, its only flickering and you need to look deeper and address the issues to move ahead in the 21st century. You dont judge the character of the nation by the glamour, IT engineers, cellphones, cricket players but to judge the country as a whole.

The Great White Flight!!
I had a rather lazy Sunday afternoon today and by chance I happen to come across this article in the Wall Street Journal about how the white population of kids is decreasing in the predominantely Asian schools of Cupertino and they are choosing to move to other school destricts with lesser asian population.

Cupertino, a small city in the southbay where 45% of the population is Asian (Chinese or south asian) descent. To put this number in perspective, the entire asian population in the United States is barely 4%.

Ten years ago before the great technology boom took place, Cupertino was a small towm predominantely white neighbourhoods, a sleepy town indeed with orchid trees. Slowly the demographics of the region changed with more asians moving into upper and middle-class white nieghbourhoods. As a result the schools also saw a change in the student ratio of whites to asians. Ten years ago, more than 52% students were whites, with other blacks, hispanics and asians. Today about 25% of students are whites.

Why is this trend being seen?
Firstly as a result of asian communities growing in the area, the number of asian students has increased in the classrooms. Asians students tend to focus more on science and math rather than liberal sciences or sports.
Secondly Asian parents especially first generation parents pressure their kids to do well in these subjects rather than have their kids choose something of their own liking.
This has much to do with the psychology of the parents who faced competitions in their native lands to get admission to good colleges. Therefore this emphasis on good grades is causing asian kids to study even more harder. They are enrolled into special tutoring classes, summer schools etc just so that they an edge over other kids in the school. Therefore a student with a 3.0 GPA feels he is an underacheiver when s(he) might be a stellar performer in a predominantely white school where competition is lower and students are encouraged to pursue other subjects besides science and math.

In fact the same complaint of competition is echoed by other second generation asians as well.

Inspite of this academic competition, there are no racial tensions between communities and some white students infact feel that they perform better with great competition around.

I can totally relate to this situation with my own schooling background. My parents especially my father cared more about how I performed in math and sciences as compared to my scores in english and history which I enjoyed more. The pressure on every Indian kid is to either become a doctor or an engineer. They were never really encouraged to become a writer or a stage actor or pursue a career in sports. The competition and pressure on the kids is tremendous starting from summer schools to tutoring classes for practically every subject and performing well in the two critical years of the indian schooling system - 10th grade ( to enter into higher secondary school) and 12 grade( to enter into under-graduate program) because these two years are a make-or-break years for your career. I could see the comparisions being made between me and my father's co-workers kids or my neighbors kids or how my cousin was performing. Everybody was caught in that system. This is definetly not limited to India.

I had a chinese co-worker in my previous job and she used to tell me that her 14 year old was learning C++ and Java besides doing his regular schooling. She was a first generation immigrant too, which just validates what I had stated before.

Personally I think competition is good, but the problem is with parents deciding what their kids should do rather than kids deciding what they want which is also where the problem exists. Because kids at that age really dont know what career they want to pursue.

Well this cycle of competition will continue...Today chinese and indians are working hard to become successful... 15 years from now, the chinese and indians will be complaining about people of african descent being competitive.
As new generation enjoys the fruits of labor of their older generation and relaxes, a new group is waiting to pick your slack.