I picked up trading in equities, indices, commodities and currencies at the age of 47 because the traditional brick and mortar business models are crumbling owing to pandemic and the changing global economic scenario thereof. Besides, I always had the knack, flair and penchant for leveraging on the superlative performance of blue-chip companies and other rewarding tradable assets mentioned above.
Here are 15 reasons for my belief:
- No credit – There is no credit (udhaar in Hindi) in this business on either side – buying or selling. There are no worries whatsoever about recovery of the payment due to you. SEBI (Securities & Exchange Board of India) ensures that settlement does happen in T+2 days (on the third day).
- No relationship biases – You do not know the buyer or the seller and therefore you do not have to maintain relationships or personal rapport with anyone (and the related biases that creep in e.g. same religion, community, caste, regionality etc.).
- 100% transparency – The price of the stock/scrip, index, commodity and currency is visible to all as same, you could be seeing it from anywhere across the world.
- No bulk discount – We all have different financial capacities. Even if we buy 100 shares or 1,00,000 shares, the price remains the same. No one can negotiate just because he/she has stronger financial muscle.
- No exit cost – If you exit any traditional business, there are exit costs e.g. you need to pay the staff, sell off the infrastructure etc. In online asset trading, you can enter, exit and re-enter at the press of a button without any exit cost (excluding a petty brokerage and related taxes of course).
- Zero expansion cost – Unlike yet another factory (manufacturing business) or call center (service business) and staff salaries, you have no expansion cost in trading except the increase in amount you wish to trade with.
- No absence cost –Intraday traders will not be able to earn their daily profit at the max. You can square off your positions and take a break. You do not have to install CCTV cameras to monitor what’s happening behind your back at your facility.
- No office cost – No one comes to see how plush or big your office is.
- Location independence – You can do this business from anywhere – from your existing office, home, on the move or even while you are on a vacation.
- No government interference – There is no need for any documentation or record keeping (except the voluntary good practice of trade logs). You do not have to raise invoices and there are no compliance issues. There are no labour laws, no ESI or PF issues, no inspector raaj etc. No government official comes for checking. All you need to do is file your taxes (income tax only, not GST) based on your PAN card.
- No marketing and advertising expense – Even if you have no website or social media presence, your trading business is unaffected.
- Start with any amount – Usually there are minimum starting amounts associated with other businesses. Trading can be started with amounts as low as Rs 5000 or even less. You can increase the amount (pyramiding) as and when you gain grip and confidence.
- No one gets to know how much you earn – Generally, people make educated guesses about your earnings by looking at your office, factory, no. of employees etc. In trading, no one can judge how rich you are. Not even your spouse unless you are willing to share. There is no noise you generate that can be analyzed by anyone till the time you do not disclose it yourself.
- Only 5 days a week – All financial markets / exchanges are closed on weekends. They will not allow you to work even if you are a workaholic and are ready to work on a weekend as well. And if you happen to trade in stocks/indices, they allow you to trade till 3:30 pm only (IST) which means a half-day every day!
- Earn in boom, bust and sideways – This is the only business wherein you make money when the market is up-trending, down-trending (momentum trading) and moving sideways (swing trading).
Not to forget the fact that people of all age groups (from a 12-year-old school going kid to a retired person above 60) and even home makers can trade at any time slot convenient to them (from 9:00 am in the morning till 11:30 pm in the night).
Now, ponder over all these points and do tell me if you find any other business that’s like this business!
Student of Avadhut Sathe Trading Academy
DISCLAIMER: The author is solely responsible for the views expressed in this article. The author carries the responsibility for citing and/or licensing of images utilized within the text.