InvestorQ : Should I go for the low lying fruits in the market while trading?
Anjana Aiyar made post

Should I go for the low lying fruits in the market while trading?

Answer
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2 years ago


The problem with low lying fruits is that everybody is aware of it. In the early days, it was possible to make money out on Infosys results day by buying straddles. Gradually that opportunity started to vanish. Why did that happen? Each quarter you know pretty well that Infosys is going to be volatile on results day. Logically, it means that you should be able to make money by buying a straddle or strangle on Infosys. In reality, you rarely make money on such obvious trades. Your ability to catch a winning trade depends on how quickly you are able to catch a trend in advance or how effectively you are able to beat the crowds. It is almost impossible to make money on a trade that is obvious well in advance. The problem in obvious trades or in the low hanging fruits is that they get crowded very soon. By the time you jump on the bandwagon, the fruit is gone. That is why it pays more to put in extra effort and find out new opportunities rather than focus on the low hanging fruit.