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Thank you for the comment.

Just go and buy the call of December...u will get exactly the same result which govindji taught...u can check

​@@rakeshagarwal7715 You are right when you see things theoretically. But as you understand the same thing will behave differently depending on how one uses it. An option can be used for speculation and the same thing can be used for hedging. Similarly buying a call option and buying a synthetic future with hedging works a whole lot different. To understand this, we need to understand why synthetic future was being used. We bought futures as they were having low financing costs. To avoid the disadvantages of futures we moved to a synthetic future. So the purpose of buying synthetic futures is to reduce our funding cost. Now, when you invest using synthetic future, you have a multiplicity of strikes and multiplicity of expiries. Now, say June synthetic future is cheaper than December future, then simply buying a December call will not match the results. Similar is the case when the market goes up - an OTM put will have a fast-shifting opportunity as compared to an ITM Call. So theoretically they may seem similar but they have a lot of differences in real-life situations.

@@rakeshagarwal7715 if u purchase a call ,it is OK , if market goes up. But there is no protection ,if it goes down.

Bhaiya 10% is cost of business if you are active trader.

You had watch 20 time did you tried it out . Itried to buy December option but my broker don't allow it . Kotak neo is my broker . Any help

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What is the amount of protective put we have to buy in this strategy?? Let's say i make it on Tuesday(16th aug,22) 1) 17700ce AuG + (3 lots) 2) 17700pe aug - (3 lots) 3) 17700 PE Dec + (??) ( How many lots of protective put should I buy... 3 or just 1)

@@akhilmontu As explained in the video, for full protection, you need to buy 3 lots Dec PE. Now you think you will lose all your hedge money if nifty goes nowhere. That is why this stregy will work in long-term and when there is a crash in between. That is why he suggested this strategy with 8-10 years view

Strategy is good but this strategy can be done very easily instead of all this complex things. Let's understand with an example Considering Nifty @ 18000 on 31st Dec 2021 Now we just have to buy Nifty 18000 CE Dec 2022 Expiry Now suppose 18000 CE premium is around 1200 points So If we want to buy 1 crore worth of quantity thn we have to buy (1cr/18k) = 555 quantity So our cost of buying this call of 550 quantity ( bcz Nifty lot is in multiple of 50) is 1200* 550 = 660000 Rs Now we have approx 93 lakh rs left with us Now put this 93 lakh in debt fund @ 7% per annum and we get approx 6.5 lac return from Debt Funds So now our Risk on Overall 1 crore equity and 93 lakh debt fund portfolio is 6.6lac - 6.5 lac = 10k only And now when Nifty moves above 18000 we will be in profit with no loss and no drawdown of our portfolio Be simple 😀

Dear Bibekji You have raised a few interesting questions which are as follows: 1. "Lets assume that nifty moves up steadily by 15-20% per annum for 10 years without crashing (>1000 points in a month) in between. The net cost for hedging and rolling over will eat away into the return which could have been achieved without the hedge and roll over and you will end up earning much lower than the expected 15-20%. " Ans: You are absolutely correct. If you believe, that in next 10 years Nifty will keep on rising without crashing then you are correct. But the challenge is -> how probable you consider this scenario, against a scenario wherein you believe that market will generate 15-20% return YOY with 2 -3 big dips in between - yesterday it was corona, some time back it was US housing and some other day it was some international issue. 2. "the roll over cost shown here at 3.5% is not true. If you see the current month vs future month future prices, the roll over cost per month is appx. 70 points that translates into 70 x 12 months x 50 lot size for nifty = 42000 which is 5% of 850000 (i.e. value of one lot nifty 17000 x 50). " Ans. You are very good at mathematics and surprisingly you made a small error in your working. 5% is the approx forwarding cost YOY but if you remember the strategy, 70% of fund is only invested using future -> So 70%*5% = 3.5% and hence forwarding cost was mentioned as 3.5% & not 5% 3. " In an extreme case where the nifty rises steadily 10% (from December tot December and with little volatility in between), the net return will be zero for 10 years considering the 10% cost" Ans. You are correct in understanding that Gross cost of investment is 8.5% (3.5% of future & 5% of hedging). But as you are using future, you are saving interest on your Debt at 7%. So 70% saves 7% so your net saving is 5% per annum. So in either of the plan, your cost is around 3.5% or less. So if in case market gives a steady rise of 10% per annum, then you still end up making 6.5% and NOT a ZERO. So, in an extreme case of market rising at 10% every year then no doubt, you will make lesser then market. 4. One might argue what-if there is no hedge and the market crashes? Assuming that you are holding nifty index of all 1 crore rupees, you not do anything and just wait for recovery. Ans. Lets understand this with an example. Scenario 1: Lets say you invested Rs. 1 crore without protection at 18000 and market crashed to 12000. So your investment value becomes Rs. 67 Lacs. Now when market recovers to 18000 your value is back to Rs. 1 crore Scenario 2: You invested Rs. 1 crore with Rs. 1 crore protection at 18000 & market crashed to 12000. Your investment value will be 96.5 lacs (1crore - 3.5Lac). Now when market recovers to 18000 your investment value recovers to 144.75. So having a protection not only gives you peace of mind, in a drop to recovery scenario it not only covers its cost, it helps you beat index by 2-3% over years. If you consider point 1 & point 4 together, then in the likely case of market giving return of 15% over next 10 years and with 2 big dips, the strategy will not only help you survive those 10 years, it will help you generate 17-18% return with a max risk of 4% over any year.

@@nitingarg94 You are right when you see things theoretically. But as you understand the same thing will behave differently depending on how one uses it. An option can be used for speculation and the same thing can be used for hedging. Similarly buying a call option and buying a synthetic future with hedging works a whole lot different. To understand this, we need to understand why synthetic future was being used. We bought futures as they were having low financing costs. To avoid the disadvantages of futures we moved to a synthetic future. So the purpose of buying synthetic futures is to reduce our funding cost. Now, when you invest using synthetic future, you have a multiplicity of strikes and multiplicity of expiries. Now, say June synthetic future is cheaper than December future, then simply buying a December call will not match the results. Similar is the case when the market goes up - an OTM put will have a fast-shifting opportunity as compared to an ITM Call. So theoretically they may seem similar but they have a lot of differences in real-life situations. Hope this clarifies your doubt

Strategy is good but this strategy can be done with almost No loss and No drawdown very easily instead of all this complex things. Let's understand with an example Considering Nifty @ 18000 on 31st Dec 2021 We just have to buy Nifty 18000 CE Dec 2022 Expiry nothing else(No Put No Future) Now suppose 18000 CE premium is around 1200 points So If we want to buy 1 crore worth of quantity thn we have to buy (1cr/18k) = 555 quantity So our cost of buying this call of 550 quantity ( bcz Nifty lot is in multiple of 50) is 1200* 550 = 660000 Rs Now we have approx 93 lakh rs left with us Now put this 93 lakh in debt fund @ 7.5% per annum and we get approx 6.6 lac return from Debt Funds So now our Risk on Overall 1 crore equity and 93 lakh debt fund portfolio is 6.6 lac - 6.6 lac = 0 And now when Nifty moves above 18000 we will be in profit with no loss and no drawdown of our portfolio Be simple 😀

@@nitingarg94 True that this is simpler but which debt fund gave you 7.5% return in 2021 or in 2022 and how do know that sitting in Jan. Also if Nifty does not hit the strike price for few years your portfolio doesn't grow at all.

@nitingarg Sirji your startegy is perfect zero loss only profit, but you are forgetting one thing when the market will have a steep fall , the put that we buy against the whole position will give you profit , and with that profit you would like be convinced to buy more NIFTY etf there increasing your units but effectively your market value would only reduce by the amount of insurence protection , once the market rises back the extra etf that you purchased at lower rates because of put profit will now give you the returns

@@sagarharish2745thanks sagar for ur kind words, but i think u misunderstood something in my strategy We are not buying any put, we are just buying call......jst visit my channel u will find a detailed presentation there on it

@@nitingarg94 Your channel what is that called can you share the link

Thank you so much Sanjive Arora. We really appreciate your honest feedback 😊

Thank you. We appriciate your comment.

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Sir, from 2015 to till date , i calculate, according to your investment style for rs 10lakh investment, 30% nifty bees purchased and 70% bond investment@7%, i got rs2122603 but if i purchased simply nifty bees ETF of 10lakh at Rs83.85 than i got rs2301729.. if anyone calculate pls give me his answer..

@@BHUPINDERSINGH-wo6nx sir can u pls tell wht was your return in both cases during low made in corona fall ...this will give better idea.... pls take it in positive way,this is not to demotivate u but to get clear idea abt strategy shared,as it provides protection in downfall....so your figures will help lot... specially me...thanks

@@BHUPINDERSINGH-wo6nx If you are not taking any action intra-year, then practically end to end, market has been in range or kept on rising. Given this, you must make lesser money than ETF and this is what your working is showing.

1. Protected leverage. 2. 8-10 % is going to be cost of business. Most suitable for profitable option traders. 3. At least 1 December shall fall in huge bear market. So minimum 5-10 year required for this strategy to work. Or you get the idea when to cover the future and make new trade. March 2020. 4. Don't be carried away, actually returns are less. But if you know what is required for proper implementation then it's free money. 5. We can finance Dec put buy by sell call option of Dec. Covered call. But it will cap our profit on upside. 6. If you have proper trend following system then if market goes down we can cover few future lot and buy only our system again says uptrend. Little risky if you can't identify the trend. Sell high buy low. 7. Best thing about this strategy is that we can buy future with confidence. 8. This strategy will work good if you are efficient in execution and can find cheaper synthetic future otherwise buy a Dec month call. Same results. 9. Better Alternate to this strategy is that make a Dec month debit call spread. Buy ATM( little OTM) Call option sell far OTM call option. Now you can be little innovative with selling far OTM call option. Also bring buy leg up when it become ITM. 10. Enjoy

Your comment is pricious to us. Thank you.

Strategy is good but this strategy can be done with almost No loss and No drawdown very easily instead of all this complex things. Let's understand with an example Considering Nifty @ 18000 on 31st Dec 2021 Now we just have to buy Nifty 18000 CE Dec 2022 Expiry Now suppose 18000 CE premium is around 1200 points So If we want to buy 1 crore worth of quantity thn we have to buy (1cr/18k) = 555 quantity So our cost of buying this call of 550 quantity ( bcz Nifty lot is in multiple of 50) is 1200* 550 = 660000 Rs Now we have approx 93 lakh rs left with us Now put this 93 lakh in debt fund @ 7% per annum and we get approx 6.5 lac return from Debt Funds So now our Risk on Overall 1 crore equity and 93 lakh debt fund portfolio is 6.6lac - 6.5 lac = 10k only And now when Nifty moves above 18000 we will be in profit with no loss and no drawdown of our portfolio Be simple 😀

@@nitingarg94 hi, elaborate on a scenario when the nifty is at say 16800 on 31dec2022

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Every f2f is wonderful✨😍

Strategy is good but this strategy can be done with almost No loss and No drawdown very easily instead of all this complex things. Let's understand with an example Considering Nifty @ 18000 on 31st Dec 2021 Now we just have to buy Nifty 18000 CE Dec 2022 Expiry Now suppose 18000 CE premium is around 1200 points So If we want to buy 1 crore worth of quantity thn we have to buy (1cr/18k) = 555 quantity So our cost of buying this call of 550 quantity ( bcz Nifty lot is in multiple of 50) is 1200* 550 = 660000 Rs Now we have approx 93 lakh rs left with us Now put this 93 lakh in debt fund @ 7% per annum and we get approx 6.5 lac return from Debt Funds So now our Risk on Overall 1 crore equity and 93 lakh debt fund portfolio is 6.6lac - 6.5 lac = 10k only And now when Nifty moves above 18000 we will be in profit with no loss and no drawdown of our portfolio Be simple 😀

@@nitingarg94 niftybees buy nahi karna hai ?

@@sandippatel3680 its depend on you.....where u will invest remaining 93 lakh rs if u invest whole amount in bonds thn u will not face drawdown period.....but if u invest whole amount in niftybees thn u may face drawdown in niftybees In my view 60 lakh niftybees and 33 lakh in FD @ 6% is a better option to invest rather than bonds

Important points to learn for me in this video is: 1. Invest in Index through ETF rather than equity 2. Buy aggresively when market corrects and hold it. 3. There is no holy grail strategy in the market other than patience and discipline in investing.

@@amitbhattar789 here how to recover losses when market crash big way ? (as buying fut, selling put & buying call ATM, all that means you are bullish) How we can get profit from put selling when market going down ?

@@uvjoshi07 In the video, Govind ji is asking to buy a long expiry Put to get insured from the falling market. Put selling will be profitable only in bullish market as you identified correctely. The problem is that futures have delta of 50 whereas At the money Put has 25 delta. The Put delta would turn to 50 when it is significantly In the money but by that time, Futures would give significant losses and the profits from Long Put cannot outmatch it. Alternatively, we can buy 2 Put options to match delta of Future but then the insurance cost would double.

@@amitbhattar789 Sir, I once again checked the video they asked to buy call & sale put one lot each Put ITM preferred. Buying fut one lot is bullish, buying call is bullish & selling put is also bullish.

@@uvjoshi07 Sir, you got little confused. In that segment Govind ji was talking about synthetic futures. In regular future contracts, if we buy futures and the market goes down we are required to bring funds for mark to market losses (MTM). This would be troublesome but we can create same future position with the help of options also which would not require to bring funds for MTM losses immediately. Buy Call + Sell Put = Long Future Sell Call + Buy Put = Short Future Left hand side positions are known as synthetic futures. The synthetic futures are then required to be insured by buying long expiry Put. I hope it clarifies the doubt. Though once you understand the above concept, you would feel that the whole idea of creating synthetic futures in the above strategy by Govind ji and then protecting it by Put can simply be acheived by buying a long duration call option as I was saying in my original comment. So, for me his strategy does not make sense.

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Did u become rich by trading only ,is it possible??

Absolutely correct 👍

Difference might be because you don't pay in cash or just 50% of the prem. and balance is utilized from collaterals.

@@laxsri Sir we do not pay in cash, but when you do futures, you have to pay MTM in cash right? plus, when you are buying put option for hedging, you are anyways paying cash, so what is the point in doing all these complicated things ? instead whatever premium you are spending in hedging for buying put option, just buy a call option with that same amount. Result, 1. all margin will be free 2. you do not have to worry about MTM difference 3. Yo do not have to roll over future contracts hence nullifying the roll over cost every month. So why do all this ?

The synthetic future is for month over month only but, the long-term Put you will buy for hedging would be yearly. Fall can be reinvested - When the market falls you will only loose your PE premium but the profit you have will be invested at better levels. So, next time when market reaches to same level, you will have ahigher quantity than you had before the fall(Profitable).

@@shukbindersingh9875 Bro, firstly, let us assume you buy a future at 17500 and buy a yearly put option at 17500. Now by November (or by December expiry if you decide to keep the position and not roll over to the next year) if nifty is trading at 16500, toy will make a (1000-premium paid) rs profit in PE you have bought. But, that profit will be adjusted against the loss in the futures which you have also bought at 17500 and is now in a loss of 1000 rs. So you see, the profit in the PE bought is going to be adjusted in the loss against the futures so how can you reinvest ?? it is not possible bro. So basically you are loosing the premium paid here as well. So why not just buy a CE if you are anyways going to loose the premium ?

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Thank you for the comment.

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Strategy is good but this strategy can be done with almost No loss and No drawdown very easily instead of all this complex things. Let's understand with an example Considering Nifty @ 18000 on 31st Dec 2021 Now we just have to buy Nifty 18000 CE Dec 2022 Expiry Now suppose 18000 CE premium is around 1200 points So If we want to buy 1 crore worth of quantity thn we have to buy (1cr/18k) = 555 quantity So our cost of buying this call of 550 quantity ( bcz Nifty lot is in multiple of 50) is 1200* 550 = 660000 Rs Now we have approx 93 lakh rs left with us Now put this 93 lakh in debt fund @ 7% per annum and we get approx 6.5 lac return from Debt Funds So now our Risk on Overall 1 crore equity and 93 lakh debt fund portfolio is 6.6lac - 6.5 lac = 10k only And now when Nifty moves above 18000 we will be in profit with no loss and no drawdown of our portfolio Be simple 😀

@@nitingarg94 what ever you are saying will not make money in down trend

@@expirytrader5802 I think u misunderstood something Jst read my startegy again Infact in downtrend u can generate more returns Still if u hv an query visit my channel

@@nitingarg94 it seems you are not concerned about safety.

Strategy is good but this strategy can be done with almost No loss and No drawdown very easily instead of all this complex things. Let's understand with an example Considering Nifty @ 18000 on 31st Dec 2021 We just have to buy Nifty 18000 CE Dec 2022 Expiry nothing else(No Put No Future) Now suppose 18000 CE premium is around 1200 points So If we want to buy 1 crore worth of quantity thn we have to buy (1cr/18k) = 555 quantity So our cost of buying this call of 550 quantity ( bcz Nifty lot is in multiple of 50) is 1200* 550 = 660000 Rs Now we have approx 93 lakh rs left with us Now put this 93 lakh in debt fund @ 7.5% per annum and we get approx 6.6 lac return from Debt Funds So now our Risk on Overall 1 crore equity and 93 lakh debt fund portfolio is 6.6 lac - 6.6 lac = 0 And now when Nifty moves above 18000 we will be in profit with no loss and no drawdown of our portfolio Be simple 😀

Same doubt from my side as well. Please clarify

In Option 2...You do Synthetic Futures (Buy CE + Sell PE) on a month to month basis...that is why he referred to the futures carrying cost of 5%. And the Put that you buy for protection - is to be done for December month only. So there is no question of Put Buy and Put Sell cancelling each other. Does that make sense?

@@srtwou In Option 2...You do Synthetic Futures (Buy CE + Sell PE) on a month to month basis...that is why he referred to the futures carrying cost of 5%. And the Put that you buy for protection - is to be done for December month only. So there is no question of Put Buy and Put Sell cancelling each other. Does that make sense?

@@PriyadarshanJoshi in video he showed synthetic future for long term...Dec 22.

@@PriyadarshanJoshi makes sense if you are envisaging monthly but it would take much more out of the pocket if considered monthly. Bcoz if Nifty at 17500, CE will be costlier than put

1. Protected leverage. 2. 8-10 % is going to be cost of business. Most suitable for profitable option traders. 3. At least 1 December shall fall in huge bear market. So minimum 5-10 year required for this strategy to work. Or you get the idea when to cover the future and make new trade. March 2020. 4. Don't be carried away, actually returns are less. But if you know what is required for proper implementation then it's free money. 5. We can finance Dec put buy by sell call option of Dec. Covered call. But it will cap our profit on upside. 6. If you have proper trend following system then if market goes down we can cover few future lot and buy only our system again says uptrend. Little risky if you can't identify the trend. Sell high buy low. 7. Best thing about this strategy is that we can buy future with confidence. 8. This strategy will work good if you are efficient in execution and can find cheaper synthetic future otherwise buy a Dec month call. Same results. 9. Better Alternate to this strategy is that make a Dec month debit call spread. Buy ATM( little OTM) Call option sell far OTM call option. Now you can be little innovative with selling far OTM call option. Also bring buy leg up when it become ITM. 10. Enjoy

which eye of yours has opened

Further managing through only call shall be beneficial when one actively trades, which in this case also can be done simultaneously. So this strategy will act as one level up for diversification.

He is saying u will be protected after 5 % cut . So why not to simply buy edges %5 % lower in weekly basis in almost 1 RS both sides available every 48 times a year . Why to give such a large premium den . His intention is only to save future after 5% but is ready to give easily 5% premium for a year which is the only profit for many writers . He is feared of Black swan . He should be . But there are more better ways to protect the future den to do long term contracts .

Other than grossly underestimating ATM put cost, there's a basic flaw in the computation ( pl check my comment) and the difference isn't trivial. The speaker conveniently glosses over it

From the comments, it's clear that you're the only one who has understood the basic flaw in this entire video.

Spot on. I was about to say the same. Even in a crash year like 2020. If we hold outs till the end the. Again the entire put premium will be lost. Ideally we should have cashed out the put on March 23. And bought fresh ATM puts at low price. But we donno the bottom. So the strategy needs some rules like if market crashes more than 10% then we need to cash out the put etc. otherwise If market goes down and then recovers the entire premium is waste. Also.

That is correct. But buying Futures and Buying Puts are giving you an extra edge to shift the trades at lower cost. That means..... many times we get the chance to shift the Futures from one maturity to next maturity at lower cost and same is the case with Puts too. But when we trade in Calls, you don't get that option to reduce the cost.

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Strategy is good but this strategy can be done with almost No loss and No drawdown very easily instead of all this complex things. Let's understand with an example Considering Nifty @ 18000 on 31st Dec 2021 Now we just have to buy Nifty 18000 CE Dec 2022 Expiry Now suppose 18000 CE premium is around 1200 points So If we want to buy 1 crore worth of quantity thn we have to buy (1cr/18k) = 555 quantity So our cost of buying this call of 550 quantity ( bcz Nifty lot is in multiple of 50) is 1200* 550 = 660000 Rs Now we have approx 93 lakh rs left with us Now put this 93 lakh in debt fund @ 7% per annum and we get approx 6.5 lac return from Debt Funds So now our Risk on Overall 1 crore equity and 93 lakh debt fund portfolio is 6.6lac - 6.5 lac = 10k only And now when Nifty moves above 18000 we will be in profit with no loss and no drawdown of our portfolio Be simple 😀

Strategy is good but this strategy can be done with almost No loss and No drawdown very easily instead of all this complex things. Let's understand with an example Considering Nifty @ 18000 on 31st Dec 2021 Now we just have to buy Nifty 18000 CE Dec 2022 Expiry Now suppose 18000 CE premium is around 1200 points So If we want to buy 1 crore worth of quantity thn we have to buy (1cr/18k) = 555 quantity So our cost of buying this call of 550 quantity ( bcz Nifty lot is in multiple of 50) is 1200* 550 = 660000 Rs Now we have approx 93 lakh rs left with us Now put this 93 lakh in debt fund @ 7% per annum and we get approx 6.5 lac return from Debt Funds So now our Risk on Overall 1 crore equity and 93 lakh debt fund portfolio is 6.6lac - 6.5 lac = 10k only And now when Nifty moves above 18000 we will be in profit with no loss and no drawdown of our portfolio Be simple 😀

Nitinji, you didn't add selling put calculation, isn't it needed?

@@sangitasojitra5427 bcz we r not selling any put in this.....we r just buying call nothing else

@@nitingarg94 Nitin could you please explain more did not understand properly if market down what will happen

​@@nitingarg94 just one catch here your equity exposure here isn't 1 crore its 50 lakh. An ATM option has a delta of 0.5. So for 10K risk you're putting up 1 crore of capital each year where if the Market doesn't move or goes down you earn basically nothing but if it goes up, you earn on your 50 lakhs. So if market goes up 15 percent your portfolio goes up 7.5 percent. Plus all your gain would be taxed short term. no free lunch in the markets.

Amazing f2f and sharing such great knowledge 👏👏

Strategy is good but this strategy can be done with almost No loss and No drawdown very easily instead of all this complex things. Let's understand with an example Considering Nifty @ 18000 on 31st Dec 2021 Now we just have to buy Nifty 18000 CE Dec 2022 Expiry Now suppose 18000 CE premium is around 1200 points So If we want to buy 1 crore worth of quantity thn we have to buy (1cr/18k) = 555 quantity So our cost of buying this call of 550 quantity ( bcz Nifty lot is in multiple of 50) is 1200* 550 = 660000 Rs Now we have approx 93 lakh rs left with us Now put this 93 lakh in debt fund @ 7% per annum and we get approx 6.5 lac return from Debt Funds So now our Risk on Overall 1 crore equity and 93 lakh debt fund portfolio is 6.6lac - 6.5 lac = 10k only And now when Nifty moves above 18000 we will be in profit with no loss and no drawdown of our portfolio Be simple 😀

@@nitingarg94 breakeven in this strategy will be 19200, not 18000?

@@harishpn4396 breakeven is 18000 Bcz 1200 point premium loss will be covered from interest received from balance 93 lakh funds

@@nitingarg94 with this strategy we won't be able to take advantage of buying more units of the etf at lower levels which would make huge difference when the upmove will come

@@shashankkala3437 u can take full advantage on lower prices......plz read my strategy twice If still u hv any issue visit my channel...... I shared a detailed presentation there

yes example... is the trick here ... theory tho sab bote hai...

I analyzed his strategy with strategy builder. His strategy is nothing but yearly atm option buying. Do you want me to explain??

Whatever he said can be done with 10 lakhs and rest 90 lakh can be put in debt. Which means he is confusing people by taking a long route and bigger capital.

@@faheemsameer1598 You mean call option buying?

@@sudhirthakkar yes. Ultimately that is what is happening. Take for example you are buying December month 18000 CE. How will the trade go? You will have limited loss only. Unlimited profit end of year. This is plus point of option buying as well as his strategy. But the bad thing about it is your breakeven point is shifted 500 point up. So your real breakeven will be 18500.

Answer is already given at 11:37 in the video.

@@ShaileshShah99 we are buying put hedge of December, ok but which future has to be taken, is it of current month or that too of December, grateful for your guidance thanks

@@kuldeepsinghchauhan4128 Synthetic Futures with December expiry as per this video.

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@@finideas Excellent learning sir... tks... A small query Sir...what i didn't understand is ~ 46:33 min u said to buy put at 6500 and 6000 both. Why? only one put bought @ 6500 could be enough for hedging na?

@@setgautam The Nifty was somewhere 6300.....so logically one should go with 6300PE (ATM) but since that might not be liquid so better is to go with 500 multiple strikes. So going with 6500 or 6000 is ok when you are working with single lot, however if you are working with multiple lots better is to go with both 50-50% (by this way you are actually going with ATM strike only) This is my understanding......hope this helps

@@9783633388 u r right Rohit

@@9783633388 buying hedge in December is ok but which month future or ATM call & put one has to take. Please clarify, thanks

Strategy is good but this strategy can be done with almost No loss and No drawdown very easily instead of all this complex things. Let's understand with an example Considering Nifty @ 18000 on 31st Dec 2021 Now we just have to buy Nifty 18000 CE Dec 2022 Expiry Now suppose 18000 CE premium is around 1200 points So If we want to buy 1 crore worth of quantity thn we have to buy (1cr/18k) = 555 quantity So our cost of buying this call of 550 quantity ( bcz Nifty lot is in multiple of 50) is 1200* 550 = 660000 Rs Now we have approx 93 lakh rs left with us Now put this 93 lakh in debt fund @ 7% per annum and we get approx 6.5 lac return from Debt Funds So now our Risk on Overall 1 crore equity and 93 lakh debt fund portfolio is 6.6lac - 6.5 lac = 10k only And now when Nifty moves above 18000 we will be in profit with no loss and no drawdown of our portfolio Be simple 😀

@@nitingarg94 Really is this so simple, hard to believe 🙂

@@laxsri yeah its simple but hard to believe bcz of our mindsets

@@nitingarg94 You are damn right. A simple thing has been complicated. One caveat. F&O should be used as a minimum due to taxation. For example at 30% tax bracket, the protection should be 42% higher to compensate the portfolio loss fully. This will increase the put cost from 5% to 7%. This 2% compounding loss over long term of 20 years will be devastating. If we use synthetic futures all.the gains will be 30%less. On a good year 15% return will reduce to 9.5%. I feel the best choice is a balance of investing in a portfolio and take a long term insurance of ATM put for 3 years at 7% cost including 30% tax. This is cheap. Buy and forget. At 2.5 % cost per year you have a peace of mind for 3 years. If there is a disaster in the country you can cash out at 93% of your portfolio. If not then at 15% compounding you will get a 40% growth in nifty portfolio. As a variation, we can intead of nifty have a large cap stock portfolio giving better return. Buy a nifty equivalent unit. Due high portfolio beta, the nifty units required will be higher...Approx 3% per year. So simple solution is 91% money in portfolio. 9 % towards cost of option. Forget for 3 years.

@@ghosejoy This strategy won't work with large capital bcz of liquidity issues in yearly expiries.....So no need to worry about 42% taxes......if still hv any query jst visit my Profile by clicking on DP , I shared a detailed presentation there on this strategy

Hi Vipul, liked the entire strategy on paper. But there are few questions and confusions when it comes to put it into actual trades. Would have been great if he would have given examples with actual strikes and actual trades.

Strategy is good but this strategy can be done with almost No loss and No drawdown very easily instead of all this complex things. Let's understand with an example Considering Nifty @ 18000 on 31st Dec 2021 We just have to buy Nifty 18000 CE Dec 2022 Expiry nothing else(No Put No Future) Now suppose 18000 CE premium is around 1200 points So If we want to buy 1 crore worth of quantity thn we have to buy (1cr/18k) = 555 quantity So our cost of buying this call of 550 quantity ( bcz Nifty lot is in multiple of 50) is 1200* 550 = 660000 Rs Now we have approx 93 lakh rs left with us Now put this 93 lakh in debt fund @ 7.5% per annum and we get approx 6.6 lac return from Debt Funds So now our Risk on Overall 1 crore equity and 93 lakh debt fund portfolio is 6.6 lac - 6.6 lac = 0 And now when Nifty moves above 18000 we will be in profit with no loss and no drawdown of our portfolio Be simple 😀

@@nitingarg94 Hi Nitin, i have one doubt, if market move down and closes the year say at 16000,CE will expire worthless and our ETF will show the drawdown no?

@@mathewnv9630 No need to buy ETF here. Only call buy.

Exactly what I also pondered on!! Would be great if vivekji or govindji can throw some light here

Mai bhi isi bat pe confuse hu

Hi, We appreciate your comment and we would love to hear more from you. However, we also want our learners to be financially literate, and for that we have some expert courses curated- sedg.in/ueji5vw1

Exactly invest 1 Cr in rbi bonds and buy call instead of all this gymnastics. If the market does not move for 4 years either direction..you would be down 20 percent. Am surprised that someone like Vivek is not asking this question.

Yeah.. in your case, even if the market goes down your quantity would always be the same whereas, here PE profit can be invested back and gett a better average price.

@@shukbindersingh9875 if market goes down from 17k to 13k, we would be buying 13000 ATM CE. Automatically your average price will be taken care of. We would be losing only CE amount in case of loss while entire capital will continue to earn interest from wherever it is invested

Thank you.

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bhai thoda aur study karo. call option buy toh karke dekho. Aur jab tum synthetic future banaoge toh sab samjh aa jayega. put se put kat jageya aur tum kewal call option buyer ho.

@@MrVikasingh1210 if you create insurance and synthetic future at same strike and same expiry then it will nullifying puts , but at different expiry it will work as per strategy .

​@@prasadkale232 Sir aap opstra mein December month ka CE option buy karo. Then calculate the price of doing the future forwarding( approx 5%) aapko December ka call option bhi 5% premium par milega. Request you to do the back testing you will understand. Sir below this you can read if you want else..... 1. Protected leverage. 2. 8-10 % is going to be cost of business. Most suitable for profitable option traders. 3. At least 1 December shall fall in huge bear market. So minimum 5-10 year required for this strategy to work. Or you get the idea when to cover the future and make new trade. March 2020. 4. Don't be carried away, actually returns are less. But if you know what is required for proper implementation then it's free money. 5. We can finance Dec put buy by sell call option of Dec. Covered call. But it will cap our profit on upside. 6. If you have proper trend following system then if market goes down we can cover few future lot and buy only our system again says uptrend. Little risky if you can't identify the trend. Sell high buy low. 7. Best thing about this strategy is that we can buy future with confidence. 8. This strategy will work good if you are efficient in execution and can find cheaper synthetic future otherwise buy a Dec month call. Same results. 9. Better Alternate to this strategy is that make a Dec month debit call spread. Buy ATM( little OTM) Call option sell far OTM call option. Now you can be little innovative with selling far OTM call option. Also bring buy leg up when it become ITM. 10. Enjoy

I can explain you all the figures in simple manner Jst visit my video on my channel to connect me

Did anyone answer this??

no I think

30 Lakhs for ETF 1 Lot of nifty around 9 Lakh So in 70 lakh we can buy 8 Lots And margin of these lots is around 9 Lakh, which can be adjusted against stocks pledged So total 30 lakh stock + 70 lakh nifty = 1 Crore

@@POFPFNB plus five lacs for buying put options as protection

Thank You

This must be replied

Change broker... new age broking firms Don't charge

@@jeevanreddy6186 please mention some?

Strategy is good but this strategy can be done with almost No loss and No drawdown very easily instead of all this complex things. Let's understand with an example Considering Nifty @ 18000 on 31st Dec 2021 Now we just have to buy Nifty 18000 CE Dec 2022 Expiry Now suppose 18000 CE premium is around 1200 points So If we want to buy 1 crore worth of quantity thn we have to buy (1cr/18k) = 555 quantity So our cost of buying this call of 550 quantity ( bcz Nifty lot is in multiple of 50) is 1200* 550 = 660000 Rs Now we have approx 93 lakh rs left with us Now put this 93 lakh in debt fund @ 7% per annum and we get approx 6.5 lac return from Debt Funds So now our Risk on Overall 1 crore equity and 93 lakh debt fund portfolio is 6.6lac - 6.5 lac = 10k only And now when Nifty moves above 18000 we will be in profit with no loss and no drawdown of our portfolio Be simple 😀

@@nitingarg94 your idea is good , do you mean to say 550/50 = 11 lots . If you plan to invest in entire balance 93% in debt / bonds then you need not waste this 7 % as your capital is already protected. so in my opinion this is useful only when you have exposure to capital market where the capital is stake at any point of time.

@@srinimd I think u misunderstood something Yeah we buy Nifty call 550 (11 lot) quantities worth of 1 crore So tell me how my capital is protected if market closes below 18000 at the year end In that case my entire premium of 11 lots around 6-7 lakhs will be zero.....so to cover that loss i suggested put balance fund into safe GOVT/RBI bonds where capital is never on risk We can also put this balance fund in Nifty ETF for CAGR 12-14% but thn we hv to finance next year premium of 11 lot from our own if market closes below our levels at the end of year

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True. That's a better way

Yup

That's why I think we need to keep 30% Niftybee in collateral

Option buy ka premium khatam hoga cash kyu bharna hoga

Instead do call selling.

Same confusion here too

When the market falls won't you rollover to lower strike with lower premium? Because overall synthetic future cost would come down as well?

In future, if market is at same point, you loose nothing, but if you buy 2 CE lots, you will loose whole premium, but if you buy CE and sell pe, you will loose nothing... Also check delta... It should be 1, which is not in this case....

Every month your theta will erode all profit if u don't sell a put...

@@navneetgupta7323 why we will buy 2 CE, instead of buy future and buy PE, buy only one CE, it has same payoff.

@@pg1977 payoff of buy one CE or buy PE + future will be the same. So no difference

👌

Same question

Check zerodha..u will get 90% on government bonds

One lot nifty futures value around 8.8 lacs. Margin required to buy a future lot is 1.1 lacs

@@srikanths8605 in the video he mentioned Nifty etf. Gov bonds could be considered for the debt portfolio though.

Hi, We are glad you enjoyed our video. We will surely come up with more! However, we also have more such opportunities for our learners, so that they can get more exposure. You can have a look here- sedg.in/vphngz35

Yes, but zerodha may not be a viable option.. they are known to restrict long term options

@rishab - any idea which broker provide long term options to buy

@@naveenblr86 same question bro.. Which broker allowing ?

I do it through IIFL.. i am sure there are more..

Yes upar se gaya 30℅ equity Phir future or ce pe

Sirjee aapka to samaz aya ye video,kindly ek video banakey dijiye is video ki jusmey example hay.

try in sensibull staregy builder trial

Strategy is good but this strategy can be done with almost No loss and No drawdown very easily instead of all this complex things. Let's understand with an example Considering Nifty @ 18000 on 31st Dec 2021 We just have to buy Nifty 18000 CE Dec 2022 Expiry nothing else(No Put No Future or Synthetic Future) Now suppose 18000 CE premium is around 1200 points So If we want to buy 1 crore worth of quantity thn we have to buy (1cr/18k) = 555 quantity So our cost of buying this call of 550 quantity ( bcz Nifty lot is in multiple of 50) is 1200* 550 = 660000 Rs Now we have approx 93 lakh rs left with us Now put this 93 lakh in debt fund @ 7.5% per annum and we get approx 6.6 lac return from Debt Funds So now our Risk on Overall 1 crore equity and 93 lakh debt fund portfolio is 6.6 lac - 6.6 lac = 0 And now when Nifty moves above 18000 we will be in profit with no loss and no drawdown of our portfolio Be simple 😀

@@nitingarg94 put sell calculation kaise hoga

@@RavinderKumar-hv9iq put sell nhi krna isme.....only call buy krna hai

But synthic future me to ce buy and pe sell hota hai same strike ka

@@RavinderKumar-hv9iq we r not making any synthetic future in my strategy....we are just buying naked at the money Call dec expiry nothing else

:)