SH's trust with options - aim to make 50% or more returns per annum

[Tradewithhunter]

How do you hedge this huge portfolio ? Just asking

Assume this portfolio is worth 7.5 Lakhs .... I also bought 3 lots of 7500 PE @ 200 (Dec series). So 30000 insurance premium paid to hedge for next 6 months...Which is Rs 5000 per month .....this is the insurance I am paying per month to hedge any losses on this portfolio of 7.5 lakhs ....

Now I have no risk for downside for next 6 months and my portfolio is fully hedged... downside risk absolutely zero and upside potential is unlimited.

Paying Rs 5000 per month to sleep peacefully on 7.5 lakhs investment...without tension of global wars etc is a bliss...

When Dec comes ..I can again buy June 2015 puts and continue to sleep peacefully ...

Cheers
SH

 

[Vertigo_1985]

I have sold PE (puts) for July so its a bullish position for the short term ...... selling July as June puts dont have much premium left now ..

Nifty bounced from 7500 levels (spot) where I expected some support hence exited bearish positions and opened this bullish one...

If Nifty (spot) breaks 7500 and stays below it in coming days, I will again become bearish and start writing calls.

Cheers
SH

which strike and why that strike ?

 

[srri]

Assume this portfolio is worth 7.5 Lakhs .... I also bought 3 lots of 7500 PE @ 200 (Dec series). So 30000 insurance premium paid to hedge for next 6 months...Which is Rs 5000 per month .....this is the insurance I am paying per month to hedge any losses on this portfolio of 7.5 lakhs ....

Now I have no risk for downside for next 6 months and my portfolio is fully hedged... downside risk absolutely zero and upside potential is unlimited.

Paying Rs 5000 per month to sleep peacefully on 7.5 lakhs investment...without tension of global wars etc is a bliss...

When Dec comes ..I can again buy June 2015 puts and continue to sleep peacefully ...

Cheers
SH

If our portfolio is small (around 2 lakhs),is it better to take 3 months calls/puts for hedging ?

 

[trader_ks]

Dear SH,
I doubt that 3 lots of Nifty can hedge 7,50000 worth portfolio.

Rate at which stocks move is far far more then Nifty movement. So how 10 stocks can be hedged by just 3 Nifty options?
I think individual stock hedging is required or more Nifty options are required.

 

[anilnegi]

Dear SH,
I doubt that 3 lots of Nifty can hedge 7,50000 worth portfolio.

Rate at which stocks move is far far more then Nifty movement. So how 10 stocks can be hedged by just 3 Nifty options?
I think individual stock hedging is required or more Nifty options are required.

Trader_Ks

the main aim of hedging is to protect the initial capital, just like LIC nobody want to die but still we take life insurance policy for just in case, hedging is same as per

Anil negi

 

[toughard]

Tradewithhunter

are you talking about delta hedging of portfolio?
or index hedging ? if its Index hedging whats the beta of your portfolio and how you calculated it?

thanks
toughard

 

[Tradewithhunter]

Exited 7600 CE shorted at 50 ... no profit no loss...

Written 7500 PE (July series) .. 2 lots at 141 ..SL 180

Cheers
SH

Nifty spot has broken down below 7500, exit 7500 PE at 160 now.... Rs 1900 loss

Shorted 7500 calls now at 197 (July) .. 2 lots...

Capital 112900-1900 = 110000

Cheers
SH

 

[Tradewithhunter]

Tradewithhunter

are you talking about delta hedging of portfolio?
or index hedging ? if its Index hedging whats the beta of your portfolio and how you calculated it?

thanks
toughard

I have assumed 1.5 Beta for my portfolio hence 3 lots of Nifty shorted per 7.5 Lakh in portfolio.

This is just an assumption and not based on strict mathematical calculations. Obviously if Nifty turns downwards ...I will add Nifty futures shorts to hedge further if required.

Cheers
SH

 

[Tradewithhunter]

Nifty spot has broken down below 7500, exit 7500 PE at 160 now.... Rs 1900 loss

Shorted 7500 calls now at 197 (July) .. 2 lots...

Capital 112900-1900 = 110000

Cheers
SH

Mkts bounced again from 7500 support levels ... Nifty calls exited at 236 .. loss of 39 points...

Capital 110000-3900 = 106900

Written 7500 Puts now (July) at 118

Cheers
SH

 

[anilnegi]

Mkts bounced again from 7500 support levels ... Nifty calls exited at 236 .. loss of 39 points...

Capital 110000-3900 = 106900

Written 7500 Puts now (July) at 118

Cheers
SH

Sh

Starting capital Rs. 1 lac, as on Date Rs. 106900/- return 6.9% from March to July, dont you think the gain would be more if you concentrate on stock futures or even stock options.

anil