General Trading Chat

[Smart_trade]

St Sir
I would like to ask something about Friday market.
Few monthes back you said "when any market swings 800 points up & down within few minutes .its no trend, its just crazy volatility"..I have quote this in my trading diary.I follow your advice regarding intraday trading religiously.So, I didnt participate in Friday market trading.
So, was Friday market same as you told crazy volatility or Should have been traded that market?
Thanks

Our markets are in downtrend for last few days....Friday there were many factors which added to the volatility and markets crashed few hundred points and also recovered few hundred points.On Friday the trend was already down so if one is short during the day he could have made money....but the recovery also was fast and furious.....that recovery does not mean that the uptrend has started.

To trade such markets or not depends on can you switch positions very quickly ? It is difficult to trade such markets from both sides....but if you can do it then trade else stay away .If one is not very quick, and not rigid on stoploss then chances of loss on such days is very high.

Smart_trade

 

[ncube]

With DSP Blackrock mutual fund dumping DHFL paper at steep discount I suggest you wait till dust settles down in liquid and bond funds too....

I find that short term bond funds I have invested are not affected in Friday carnage.I suggest the following short term funds :

1) Franklin India Ultra Short Bond Fund Super institutional plan Direct growth.
2) Reliance Ultra Short Duration Fund Direct Growth.

You may study and consider other funds for short term parking of your funds.

Smart_trade

Sir, how do you plan the fund movement from these funds to your trading account? For example take the case of friday, market was down and gave good opportunity to add to our portfolio, but since the funds are parked in short term funds it takes about a day or 2 to credit to our account and we miss the opportunity. Earlier I used to buy short term funds but now I am using liquidbees instead as the margin gets added immediately on making a sale. Is there a better way to manage this?

 

[Smart_trade]

Hi St SIR
Whats the risk of investings in those funds?
where do fund invest our money?
what is tax libaility on returns of those funds?
thanks

Risks are if the bond prices undergo changes drastically then these funds also can suffer losses.
These funds invest our money in various short tenure maturing bonds so that the effect of bond pricing is minimal.
Tax treatment is as per debt mutual funds.So if you make short term profits it is taxed as short term capital gains...after 3 years it is taxed as long term capital gains with indexation benefits....but as we invest for short term,it is subject to ST capital gains.....we use it for parking the surplus funds and not for investments.

ST

 

[Smart_trade]

Sir, how do you plan the fund movement from these funds to your trading account? For example take the case of friday, market was down and gave good opportunity to add to our portfolio, but since the funds are parked in short term funds it takes about a day or 2 to credit to our account and we miss the opportunity. Earlier I used to buy short term funds but now I am using liquidbees instead as the margin gets added immediately on making a sale. Is there a better way to manage this?

Going out for my evening walk and excercises...will reply on my return....pl bear with me .

Smart_trade

 

[ncube]

Going out for my evening walk and excercises...will reply on my return....pl bear with me .

Smart_trade

Sir please don't make me feel guilty..there is no obligation...you may reply whenever you are free.

 

[travi]

Sir, how do you plan the fund movement from these funds to your trading account? For example take the case of friday, market was down and gave good opportunity to add to our portfolio, but since the funds are parked in short term funds it takes about a day or 2 to credit to our account and we miss the opportunity. Earlier I used to buy short term funds but now I am using liquidbees instead as the margin gets added immediately on making a sale. Is there a better way to manage this?

A few things will get planned out of habit. One will soon realize that there isn't much of a difference in the short/ultra short Liquid MFs anyway.
and you wont even make that much in say 10-20 days either, unless its 100Cr
At 1Cr with 7%p.a, its inr. 1918 per day.

Especially if you're swinging with MF you need the speed, so the trick I use for that is to use the same Fund house and SWITCH the equivalent units

EDIT: What I meant is, the 0.1 to 0.4 % difference in return wont matter unless the principal amount is an astronomical number when the period is a few weeks.

 

[ncube]

A few things will get planned out of habit. One will soon realize that there isn't much of a difference in the short/ultra short Liquid MFs anyway.
and you wont even make that much in say 10-20 days either, unless its 100Cr
At 1Cr with 7%p.a, its inr. 1918 per day.

Especially if you're swinging with MF you need the speed, so the trick I use for that is to use the same Fund house and SWITCH the equivalent units

EDIT: What I meant is, the 0.1 to 0.4 % difference in return wont matter unless the principal amount is an astronomical number when the period is a few weeks.

For me returns from idle cash is not a concern, rather its the availability of cash for quick purchases of stocks. Liquidbees are traded on the exchange so I can sell it and the margin is available immediately for buying new shares. However if one uses short term MF, it takes time for the funds to be credited back to our trading account.

During market uptrend its not a issue as I will be fully invested and the idle cash is low, but when the trend changes cash starts accumulating over time it needs to be managed and as I dont prefer to keep cash in broker account I am purchasing liquidbees. (This also gives about 5-6% returns) or buy short term funds. Other way is put major portion of the cash in short term fund and keep remaining in liquidbees. Hence wanted to check with ST sir if there is any better way to manage this.

 

[Smart_trade]

Sir, how do you plan the fund movement from these funds to your trading account? For example take the case of friday, market was down and gave good opportunity to add to our portfolio, but since the funds are parked in short term funds it takes about a day or 2 to credit to our account and we miss the opportunity. Earlier I used to buy short term funds but now I am using liquidbees instead as the margin gets added immediately on making a sale. Is there a better way to manage this?

I always keep certain liquidity ready in my bank account particularly when markets are in correction mode.I use local brokers for my delivery purchases. I have kept a small margin of 3 Lacs with both....but as I do only intraday cash market and delivery with them they have given me practically unlimited exposure .I can buy without having balance in my account with them and I have to make payment on T + 2 day before 10:00 am. So if I buy on Friday,I need to make payment on Tuesday before 10:00. I don’t wait till last day and I always make payments one day before the date.As long as I honour payin dates, there is no limit on how much I can buy without having money in the brokers account.But as a self discipline I never buy in anticipation of money coming in my account. The money has to be in the account before I buy.The broker is 100% sure that when I am buying I have money in my bank account and it can be transferred to him in next 10 minutes if so required,so he has a comfort level as in last so many years my payment is not delayed even once.

So I was expecting market to go down on Wednesday and given instructions for resumption before 3:00 on Wednesday ( though I was not expecting a crash.) and the money was ready in my bank account on Friday morning...all done on internet....

I am using debt funds not mainly for returns but I am scared of keeping large amount in banks due cyber frauds...so I use 2-3 funds for parking the money.

Smart _ trade

 

[ncube]

I always keep certain liquidity ready in my bank account particularly when markets are in correction mode.I use local brokers for my delivery purchases. I have kept a small margin of 3 Lacs with both....but as I do only intraday cash market and delivery with them they have given me practically unlimited exposure .I can buy without having balance in my account with them and I have to make payment on T + 2 day before 10:00 am. So if I buy on Friday,I need to make payment on Tuesday before 10:00. I don’t wait till last day and I always make payments one day before the date.As long as I honour payin dates, there is no limit on how much I can buy without having money in the brokers account.But as a self discipline I never buy in anticipation of money coming in my account. The money has to be in the account before I buy.The broker is 100% sure that when I am buying I have money in my bank account and it can be transferred to him in next 10 minutes if so required,so he has a comfort level as in last so many years my payment is not delayed even once.

So I was expecting market to go down on Wednesday and given instructions for resumption before 3:00 on Wednesday ( though I was not expecting a crash.) and the money was ready in my bank account on Friday morning...all done on internet....

I am using debt funds not mainly for returns but I am scared of keeping large amount in banks due cyber frauds...so I use 2-3 funds for parking the money.

Smart _ trade

Thanks Sir... really helpful... looks like its advantageous to have an account with a local broker...currently I dont have this flexibility as my accounts are with ICICIdirect and Zerodha.

 

[Smart_trade]

If someone wants to invest in ELSS funds for tax saving ,this is a good opportunity to invest.

Smart_trade