The last week was not good for the lazy trades.
Apparently the market moved up a little. The gain came from stocks other than the top 10 heavy weights.
HDFC and HDFCBANK have dragged the index down by a big under performance.
The status on Friday, August 07 :
We are looking at a mark to market loss of Rs. 37167.
Not good till now. It may get better in the coming days.
Not So Lazy:
This set up with options selling has done better though the picture is still far from comfortable.
Many of the sold PUTS are near the money and the strategy can get into a loss quickly if the stocks go down.
In the beginning of the year 2017, it was possible to set up this strategy with a margin of just about Rs. 13.50 laks.
Thereafter SEBI has gone into a destructive mode as far as F&O traders are concerned. Cost of trading has become prohibitive and there are no additional benefits.
The Lazy Trader Set Up now needs a margin of Rs. 2076439 for buyung the futures and Rs. 1405343 for Selling NIFTY futures.
To have a hedged set up of value Rs. 75.00 lakhs, the margin money of Rs. 3401782 is too high. Too high that it is actually atrocious.
For Not So Lazy set up, the requirement would be Rs. 2109799 for selling the PUTS.
Fortunately we are buying PUTS for hedging so the margin does not come into play.
This set up is possible with approximately Rs. 2240000. Again, not cheap.
Let us see how the strategy keeps performing and whether any wisdom comes to SEBI at any time in future.
Disclaimer: This post and examples are for teaching purpose only and are not meant as advice/suggestion to trade in these stocks. Trading in Futures and Options can lead to big losses and should be done with appropriate knowledge and advice only. Mentioning the stocks here does not imply that I have a trading position or likely to take a trade in these stocks.