Dear Sir,
Allow us to share our derivative hedge strategy which has proven track record of generating 36% yearly return from stock market irrespective of fall or rise in stock market. Our market neutral strategy is designed for the investors who want regular return which is much higher than bank fixed deposits and at the same time safeguard their capital. The strategy safeguards you from fall in stock market. You may like to have answer of following questions.
What is derivative hedging?
Derivative hedging is a tool for remaining market neutral. Under this strategy buying and selling take place at the same time so that investor remains market neutral. For instance, if we purchase HDFC Bank future worth Rs 3lacs , we will be selling at the same moment some other bank future say SBI Future of equal amount. In summary you are Rs. 3lac long and also Rs. 3lac short. This makes your exposure in the market to zero.
How do you make money if you are market neutral?
In a market neutral scenario, you make money in one deal and lose money in other deal. You square off both the transactions, once you make net profit. For instance take the live example of SBI and HDFC Bank as illustrated below :
| Transaction date | Security | Price | Buy/ sell Qty | Value | Squared off Date | Price | Value | Profit/ Loss | Net Gain |
| 2nd Dec’10 | SBI | 3112 | -96 | -300,000 | 14 Jan’11 | 2498 | 240000 | +60,000 | |
| 2nd Dec’10 | HDFC Bnk | 2408 | +124 | +300,000 | 14 Jan’11 | 2061 | 256000 | -44000 | 16000 |
During 2nd Dec 2010 and 14th Jan 2011 even though market has fallen by 14%, we made a profit of Rs 16000/- on an investment of Rs 3lac.
How much investment is required in derivative hedging?
Derivatives work on margin concept and as such you can collateral your existing stocks, Mutual Fund, cash, Liquid fund ETC. You require minimum investment of Rs 10 lacs which can be in stocks, Mutual Fund, Cheque, Liquid fund etc depending on your risk taking ability.
Why can’t you work with smaller money?
Since the strength of derivative hedging lies in taking multiple positions, we need to keep higher margins.
Have you lost money anytime?
As we said, hedging is the most secured way to make money in stock market, we have not lost any money in the past.
We are sure you will not like to miss a golden opportunity of making safe money from stock, call us or sms us HEDGE on 9967616357.
Regards,
Team Stock24x7.
