Aksha Khosla, a top-notch Mumbai-based securities analyst, is known to be result-driven, able to make sound decisions under pressure, and have an extensive understanding of investment strategies. The reason why His stockbroking organization is counted among the best in business today with a daily trading volume of 100-130 crore. His vast knowledge and incomparable recommendations to cope with the risks involved in trading on equity and derivatives in India can make anyone attain high yields.
In an exclusive interview with Aksha Khosla shared his insights about his view on the securities market, current trends, and investing in derivatives.
When and how did your trading journey start?
Ak: It was in 2003 when I entered the trading arena. I was just 19, but being a native of India’s financial capital- Mumbai, you can say that my grasp over technical analysis of the market was good from the very beginning.
How do you perceive the current market trend?
These are excellent times for India, and I see a bullish trend for the long run (several years). We are at the start of this trend. It has risen from going low in March 2020. The extraordinarily double-digit return is expected to hit the floor in the next five to ten years. Having said that, but there could be a downward cycle too -of about 8 to 20%, which could last for about six to 18 months.
The market is volatile right now? Isn’t it?
Yes, it is. But it will be short-lived. What I mean is, there could be a bearish market for about 1 to two quarters. This would result in wiping out the new entrants in the market, particularly those who have joined the league in the covid era leaving their jobs and businesses.
Can you elaborate more on the above scenario?
Let me explain the situation in another way. I have already said that the long-term growth story of India is intact. The market is already overheated, but the expected correction will be there because there are a lot of new participants who are not as knowledgeable as one needs to be to rip returns in financial trading. They have entered the market due to their job loss, closed businesses, and other reasons during the lockdowns. Hence during the market correction scenario, the retail investor confidence will remain low for a few years. It has always happened in the past as well. Eventually the markets will rise again keeping the prediction of India’s growth story intact. There will be solid business momentum driving a vibrant and more robust bull market.
Tell us about your specialization in securities market trading?
I mainly trade in the derivatives market- options, using arithmetic Greeks, other hedge tools, and strategies.
For our young and novice readers, can you tell us more about Derivatives? How are they different from stocks?
Derivatives are securities that derive their value (or are dependent) from an underlying asset like stocks, currencies, commodities, etc. Futures, Options, Forwards, and Swaps are derivatives financial instruments which are a great tool to hedge your portfolios against any market falls and crashes. It’s a bit like insurance. To elaborate more, it can also understand like this- There are four modes of the market trends -upper, downtrend, range-bound or volatile. Derivatives as a financial instrument can be used to create Hedge positions according to the market conditions using arithmetic Greek tools. It’s all about mathematics- probability and money management. If you know how is it like playing in a casino, you will understand the simile. (Laughs). Derivatives are dependent on stock and bonds. They are more complex and riskier to trade-in compared to stock trading.
Basically, going by the actual trading data all over the globe, it’s evident that 98% of traders and speculators lose money in derivatives trading, and to get into the 2% category comes with a huge learning cost of money Time and Health. For an informed and knowledgeable investor, Value investing and long-term playing is always good option. Moreover, for a seasoned derivative player who always trades using money management tools combined with the right temperament, there is always a good time to get positive returns. Their trading options are evergreen irrespective of trends of the market.
What is the best investment advice you always give to your clients?
My Three-word advice- Safely Invest in Equity. I always vouch for equity investments. I say so because studying the trends of the last 40 years, it can be asserted that equity was the best place to be in, and most predictably, it will be the same for the next 40 years. If anybody wants more clarity, then one can compare it with any other asset class, and you will find that the kind of wealth it has created is incomparable and unmatched.
One should be a seasoned player for derivatives trading as it is a very specialized field and requires an immense investment of time and knowledge.
