We launched Varsity 8 years back using this cover image and this was what we planned to attempt. Excerpts from the original post: At Zerodha we took
I have download the continuous futures data from Zerodha Pi (Zerodha’s desktop trading application) for last 200 trading days. I have got the closing prices on excel sheet, and this is how it looks – The next step is to calculate the difference between the two contracts. It is advisable...
you expect the graph to move down, then this translates to something called as a convergence. When you expect your variable to converge, you can make money (or at least attempt to make) by setting up a convergence trade.
Here is something you need to know – when someone says ‘Standard Deviation (SD)’ by default they are referring to the 1stSD. Likewise there is 2ndstandard deviation (2SD), 3rdstandard deviation (SD) etc. So when I say SD, I’m referring to just the standard deviation value, 2SD w...