Prof. Ravichandran V
I was surprised when I saw recently on television a stock (derivatives) trader from Chennai, Tamil Nadu, donating ₹50 Lakhs to Tamil Nadu CM’s Covid relief fund. When I explored further I came to know, that this trader donated ₹ 85 lakhs last year to the PM Care fund and Tamil Nadu CM’s relief fund for COVID. Last month, he announced publicly on Twitter that he would be donating 25% of his earnings and revealed his income of ₹ 2.25 crores.
We, as teachers, discuss with students the success of titans such as Elon Musk, Warren Buffett, Jeff Bezos, Bill Gates, and a few others. Still, we know little about those in our country who quietly pull off extraordinary feats without attracting the spotlight in the media.
I introduce Mr P R Sundar, a post-graduate maths teacher, who began his career in Gujarat, later moved to Singapore and became a citizen. Sundar’s interest in stock trading developed when he read a few books on stock trading and financial derivatives. One of his relatives, a stockbroker, encouraged him to take up the NSE Certification course to meet brokerage requirements. Sundar grew by leaps and bounds to become a successful options trader.
As a professor interested in financial derivatives, I teach, read and follow this area very closely. What separates this option trader, option seller to be precise, from the rest, is his extraordinary success in the last five years. His hallmark is a simple approach to selling options. Let me brief you about the financial derivatives markets and products.
<aside> 📍 All of us know how we buy or sell securities or assets in the spot or cash market. In the Financial Derivatives markets, contracts are designed with a promise or commitment to purchase or sell securities based on assets (underlying) in the future. Derivatives contracts derive value from stocks, bonds, commodities, interest rates, indices et cetera. The value of these contracts and profits are based on the spot price of the underlying asset on the expiry date of these contracts. Among derivatives, futures and options are traded through the exchange. Options contracts are further classified as Call options and Put options, which can be bought and sold through the stock exchanges. Most traders in the derivatives segment take speculative positions in either direction of the markets and thus make a profit or loss in their trades*.*
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Mr Sundar’s approach towards selling options is simple. He believes in a high probability of success in offloading options, emphasising the right strike price. Also, he says that most buyers of options contracts lose money, though the market pundits consider these low on risk and high on returns. Many disagree with his contrarian view, but his success speaks louder than words.
Last year his total profit was roughly Rs 12 crores from his trades, and he continues to do well this year. He is a high volume trader with nearly 60% in selling options and 40% of his transactions in hedging his exposure. He excels in put option selling and short straddle, to name a few, among multiple positions on options. He quickly shuffles his trading positions with movements in the market. He does not follow technical analysis and also does not set store by financial ratios. He follows the global news, company news and other economic developments and takes quick tactical decisions.
He is straightforward in his talks, training sessions, and workshops, which are available on YouTube and other social media platforms. He has given many instructive lectures on many investment opportunities and offers guidance on trading. Some of his workshops are well attended and expensive to boot.
P R Sundar had a humble beginning, studied in a small school in Chennai, fed himself through the midday meal program and stayed in a hostel. He got his first pair of slippers when he reached the 10th Standard. He took up post-graduate education in Mathematics and later became a teacher.
Despite being very successful in his profession, he makes time to educate and guide his legion of followers on YouTube.