Blog by PriyaSahu

To analyze basis risk in commodity trading, you need to understand the difference between the spot price and the futures price of a commodity, monitor how this difference changes over time, and factor in external influences like market events, supply/demand changes, and economic data. By t...

Basis risk in commodity futures trading refers to the risk that the difference between the spot price and the futures price of a commodity might change unexpectedly. This happens because spot prices and futures prices don’t always move in sync. Understanding and analyzing basis risk is essentia...

To analyze backwardation and contango in commodity markets, you need to compare the spot price of a commodity to the futures prices. Backwardation occurs when futures prices are lower than the spot price, signaling tight supply or a strong demand for immediate delivery. Contango, on the other h...

To analyze backtesting results for algorithmic trading, focus on key performance metrics such as the strategy's profit factor, maximum drawdown, Sharpe ratio, and overall profitability. Evaluate how the strategy performs under different market conditions and ensure that it doesn't overfit histo...

To analyze and trade volatility skew in options, focus on identifying the differences in implied volatility between options of different strike prices and expiration dates. A steep volatility skew may indicate potential opportunities, such as buying options with lower implied volatility or sell...

To analyze and trade support-turned-resistance patterns, focus on identifying levels where price previously bounced upwards (support) but has now failed to maintain the same price level, turning that level into resistance. This can indicate a reversal or pause in the trend, and trading strategi...

To analyze and trade options skew patterns, focus on how implied volatility (IV) differs between strike prices. When IV is higher for out-of-the-money puts or calls, it reflects market sentiment like fear or bullishness. Traders use skew to select strategies like spreads or hedges based on mark...

To analyze and trade using market delta volume charts, focus on the difference between buying and selling volumes at each price level. These charts show where aggressive buyers or sellers dominate, helping traders spot strong support or resistance zones. Look for imbalances and volume clusters ...

To analyze and trade based on a company’s supply chain risk, assess how dependent the company is on key suppliers, geographic locations, raw materials, and transportation. Any disruption—like geopolitical issues, pandemics, or material shortages—can impact profits. Traders monitor news, earning...

To analyze an options chain for potential trades, focus on strike prices, open interest, volume, premiums, and implied volatility. This helps identify where traders are active, what price levels may act as support or resistance, and which contracts offer good liquidity and risk-reward setups fo...

To analyze an options chain before trading, look at strike prices, premiums, open interest, volume, and implied volatility. This helps you identify support/resistance levels, market sentiment, and liquidity of options contracts. Use this data to choose the best strike price and expiry for your ...

To analyze an IPO before investing, you should study the company’s financials, business model, growth prospects, promoter background, and valuation. Reading the DRHP (Draft Red Herring Prospectus) is essential to understand risks and how the raised funds will be used. Don’t invest based on hype...

To analyze an industry’s growth potential, you need to study the overall demand trends, technological innovations, regulatory support, and performance of key companies in that sector. Also, look at industry reports and expert forecasts. These factors help determine if the industry is likely to ...

To analyze an annual report before investing, start by checking the company’s financial health through its income statement, balance sheet, and cash flow. Also, understand the management's vision, risk factors, and performance trends. This helps in judging whether the company is stable, growing...

To analyze alternative data sources for trading, start by exploring non-traditional data types such as social media activity, satellite imagery, web traffic data, and transaction records. These data sources provide real-time, often unique, insights into market behavior that traditional fin...

To analyze alternative data sources for trading signals, you need to explore non-traditional data like social media sentiment, satellite imagery, web scraping, and credit card transaction data. These sources can provide unique insights into market movements that may not be immediately appa...

To analyze altcoins for potential investment, you need to consider factors like market capitalization, the technology behind the coin, the development team, and the coin’s use case. By evaluating the fundamentals and technicals of altcoins, you can make more informed decisions and identify...

Analyzing agricultural futures in the context of El Niño patterns is crucial for understanding potential supply disruptions and price fluctuations. El Niño events are associated with unusual weather patterns, including droughts and floods, which can severely impact agricultural production....

The Accumulation/Distribution (A/D) Line is a technical analysis tool that helps assess the strength of a price trend. It uses both price and volume data to measure the cumulative flow of money into or out of a security. By analyzing the A/D Line, traders can determine whether a trend is s...

A wedge pattern is a technical chart formation where the price moves between two converging trendlines. This pattern can signal a potential breakout in either direction, depending on the type of wedge—rising or falling. Wedges typically indicate a consolidation phase where the market is in...