Trade with Hedge.........a better idea

S

sanjeetrathore

New Member
#1
#1
I am starting this thread for those traders who had lost a lot in the Market....The idea is to trade with hedge.....
Some Common things traders must know.....
1. Traders must follow big institutional investors....as they are the market draggers or pullers.......

2. Avoid intrady trade as I have not heard any intraday tarder becoming millonire........

3. Big traders are always positional traders......

4. Trade with proper hedge.....i.e protect your capital first....

5. Think several times before starting trade as it's your money.....
 
S

sanjeetrathore

New Member
#2
#2
For some more clarification......
1. Make a portfolio first with good large cap and mid cap stocks......(approx. investment Rs. 5.0 Lacs)

2. Take proper hedge by selling nifty calls (1 lot above 4% current market and another lot above 6% current market)

3. But 2 lot at the money put (for protecting Capital)

4. Keep position till expiry....

5. Repeat for next month contract also...same way...

6. At the end of year, You may end up with 15-20% return on Capital...
 
J

jain.er

Banned
#4
#4
sanjeetrathore said:
I am starting this thread for those traders who had lost a lot in the Market....The idea is to trade with hedge.....
Some Common things traders must know.....
1. Traders must follow big institutional investors....as they are the market draggers or pullers.......

2. Avoid intrady trade as I have not heard any intraday tarder becoming millonire........

3. Big traders are always positional traders......

4. Trade with proper hedge.....i.e protect your capital first....

5. Think several times before starting trade as it's your money.....
Click to expand...
Is intraday not profitable?
Also Postion trade give you high returns but they have similar large risks too...
so you get returns in porportion to risks taken
 
S

sanjeetrathore

New Member
#5
#5
For that risk i am advising to buy protective puts on the expense of sold call.....so you are 100% protected in downside (assuming beta 1 of your portfolio) and 4% upside capped....
 
Debarghya Mukherjee

Debarghya Mukherjee

Well-Known Member
#8
#8
You have calculated brokerage amount?

You never can protect yourself 100% from any trade. At least you will loose some money at brokerage.

Why you said that 15-20%? Any reason of such digits? It may be 2-3% also. May be negative 5-10% also.


sanjeetrathore said:
For some more clarification......
1. Make a portfolio first with good large cap and mid cap stocks......(approx. investment Rs. 5.0 Lacs)

2. Take proper hedge by selling nifty calls (1 lot above 4% current market and another lot above 6% current market)

3. But 2 lot at the money put (for protecting Capital)

4. Keep position till expiry....

5. Repeat for next month contract also...same way...

6. At the end of year, You may end up with 15-20% return on Capital...
Click to expand...
 
S

sanjeetrathore

New Member
#9
#9
@ D.M ...Brokerage shall be taken care of by dividends u receive on yr portfolio....It can't be negative as protective puts are bought every month on the expense of sold calls....On the extremely bull/bear market you should adjust yr position on rise/fall of 5 % index.
On backtesting for last three years it came avg return of 20%.
 
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