Buying Nifty futures for long term

[at145]

Experts,

I need your input on the feasibility of following approach:

Buying nifty futures for long term say for six months and above. My portfolio has declined much during recent market crash, to recover that I intend to buy nifty futures for long term, nifty would eventually gain back lost points of about 1500 or more or may fall further 1000 points. If market recovers my portfolio also would recover proportionally but I would gain much more if I buy nifty futures due to leverage involved. Now I am not sure about how long one can hold the position open in futures and what are the implications for margin and roll over charges. Please advise, is the idea worth pursuing, thanks.

 

[at145]

Hi Experts,

57 views so far but not a single reply! Maybe my idea is far fetched or foolish but I really need your frank opinion on this, thanks.

 

[timepass]

Buy Niftybees instead. Your broker will even give you some margin against them, and they will yield dividend. And you can hold them for any amount of time, and keep averaging if you feel that an upside is imminent. Or, you can dispose of them to reduce your exposure. With nifty the lot size is 50, with niftybees you can buy/sell even 1, if u so wish.

If you buy/sell nifty long futures, you will be paying a very dear premium, which will depreciate or even turn to discount by the time of its expiry date.

Niftybees have no expiry date.


Edit : And I am not an expert.

 

[at145]

Hi, thanks for the reply. However I am not clear if there is leverage available to buy niftybees, without leverage it becomes like any of my cash stock holding where the rise or fall in portfolio value would be proportionate to nifty rise or fall. The purpose of buying nifty future is to avail the leverage and hold it till the desired target is achieved that way I would be gaining more than proportionate rise. Would you please clarify your sentence about depreciation of premium as it is not clear to me, thanks.

 

[quantumquark]

Why not buy ATM/ITM put options expiring 6 months from now? if nifty falls, your options expire ITM and you make a profit. If it rises, you just lose your premium but you've insured your portfolio and it's a good hedge

 

[gsn57iaf]

Dear at145 the suggestion of investing in Nifty Bees given by timepass is good in your case. It is like investing in stock.

 

[noviceTrader555]

Experts,

I need your input on the feasibility of following approach:

Buying nifty futures for long term say for six months and above. My portfolio has declined much during recent market crash, to recover that I intend to buy nifty futures for long term, nifty would eventually gain back lost points of about 1500 or more or may fall further 1000 points. If market recovers my portfolio also would recover proportionally but I would gain much more if I buy nifty futures due to leverage involved. Now I am not sure about how long one can hold the position open in futures and what are the implications for margin and roll over charges. Please advise, is the idea worth pursuing, thanks.

Hello ,

I am not a expert ...but I am in same situation like u.


The lesson I have learned is "Dont Play the market one way "!

U cant be LONG when markets wants to go down ..you need to be short.

We all start being a Long only investor ..and that is the crux of the problem.

Pls understand your task is to make money ..whether by going short or long .

And If you cant time the market to short it ..you cant time it to go long either.


BTW you will burn your money much faster if you leverage ...without knowing the direction of market.

There are many good strategies available in Traderji which can help you.

SH 315 is a good one...I am yet to read all of them


Best

NT

 

[at145]

Hi All (quantumquark, gsn57iaf, noviceTrader555 and the readers),

Thanks for all the suggestions, trying hard to learn while loosing money fast due to market, own mistakes and high brokerage, seems like everything is against but have hope that one day it'll be alright.
Many might have considered my below question as stupid as myself have realized its stupidity due to ignorance. Anyhow learning and trying to trade by MA crossovers, Gann levels etc., sometime it works and most of the time it doesn't due to my own mistakes. Trying various option strategies also as suggested but still yet to get the confidence.
Please suggest me some simple reading material / link to learn about portfolio hedging, many thanks.

 

[prst]

Buy Niftybees instead. Your broker will even give you some margin against them, and they will yield dividend. And you can hold them for any amount of time, and keep averaging if you feel that an upside is imminent. Or, you can dispose of them to reduce your exposure. With nifty the lot size is 50, with niftybees you can buy/sell even 1, if u so wish.

If you buy/sell nifty long futures, you will be paying a very dear premium, which will depreciate or even turn to discount by the time of its expiry date.

Niftybees have no expiry date.


Edit : And I am not an expert.

nifty bees are bought and stored just like shares rite..
do we get margin and dividend on them?
plz clarify..

 

[timepass]

nifty bees are bought and stored just like shares rite..
do we get margin and dividend on them?
plz clarify..

I think yes, you do get dividend on them. You certainly get margin against them (at least with Sharekhan).