In Depth Investment

Diversification
Analysis
Saurabh Kaushik
Investment Portfolio

• Here we describe our Investment Portfolio based on the preferred risk level.
• We are assuming 1 crore as investment to describe in detail how & were we invest in
different investment portfolio by splitting 1 crore into 4 or 5 equal ratio & invest in many
portfolio.
• Here we focus zero risk in downside direction of stock market were as for upside risk our
portfolio will be risk free till upto 8-10% upside.
• We will majorly play on Index Option , Stock Put Selling option, Bonds , Cash Equities &
Fixed Deposit.
 Investment Strategy

 1) Bonds: (Debt)
 We will majorly invest in GOI bonds issued by RBI & Bharat Bonds which is generally accept by many
brokers as collateral.
 Indeed we will get 75-80% of the margin amount in brokerage account.
 We will not invest in any company bonds only Govt related Bonds we will invest which is accept by
many brokers. We can expect Return 5.75 to 7% based on Flexible Interest Rate fixed by GOI. We
will Revise our Bond Investment on every 5 years.
Return on
Annual Total
Allocation Risk Return Investment

18% Zero 6% 1.1%

Note: The Return on Total Investment is calculate based on 1 CR capital.
The Return we are taking less based on Variable Return of each Investment Strategy
 Investment Strategy

 2) FD:
 We will majorly invest in Bank FD which is generally an Scheduled Bank under RBI & Minister of Finance. (Eg HDFC
Bank,ICICI Bank etc).
 Also we will look the FD acceptance by brokers as collateral. We can expect 75-80 % of margin in broker account
after making FD as collateral.
 Return on FD may vary b/w 5.75% - 6.5% . It will be change based on Bank FD revision interest rate.
We will Revise our FD investment on every 1 yrs or 5 yrs.

Return on
Annual Total
Allocation Risk Return Investment

18% Zero 6% 1.1%

Note: The Return on Total Investment is calculate based on 1 CR capital.
The Return we are taking less based on Variable Return of each Investment Strategy
 Investment Strategy

 3) Reserve Cash Bank Liquid:

 We will keep almost 25% of the Liquid for Emergency fund if we incur any loss in our Positional & Expiry Trading.
 We will keep the fund in top most top 3 bank which will be distributed equally.
 Bank will be Scheduled Bank majorly under RBI & Minister of Finance(Eg ICICI,HDFC & SBI)

Return on
Allocation Risk Annual
Total
Return
Investment

25% Zero 3% 0.75%

Note: The Return on Total Investment is calculate based on 1 CR capital.

The Return we are taking less based on Variable Return of each Investment Strategy
 Investment Strategy

 4) Equity Investment Strategy:

 In the Equity Investment Strategy we will invest rest amount in Equity Index Fund Option only.
 We will use Positional Expiry Trading & Stock Put selling Strategy to recover rest ROI income from it.
 It has 3 model based on the Vix Volatility Range.

Model 3 (Vix 30~50)

Model 1 (Vix 10~20) Model 2 (Vix 10~20)
Sr.No Strategy Equity/Debt Allocation Sr.No Strategy Equity/Debt Allocation Sr.No Strategy Equity/Debt Allocation

1 Nifty Straddle with Hedge Equity 25% 1 Call Spread Monthly Option Equity 25% Call Spread
1 Monthly Option Equity 15%
2 Expiry Trading(Nifty & BankNifty) Equity 25% 2 Expiry Trading(Nifty & BankNifty) Equity 25% Expiry
Trading(Nifty &
3 Stock Put Sell Equity 25% 3 Stock Put Sell Equity 25% 2 BankNifty) Equity 15%
 Investment Strategy -Modal 1 (Vix 10~20)

 4.1) Nifty Straddle with Hedge:

 In this Strategy we will play Straddle option Selling in Nifty Option. As due to low vix the far OTM option value
premium is very less
 We will play two Straddle Monthly option if first one Straddle Stoploss is hit.
 We will Hedge with Put Option on downside direction.
 Next Slide will Display the Pay off Diagram of Straddle based on 80% capital utilisation of total 25% Capital Allocation.
 Downside Risk is Safe Upside 4-5 % is Safe . If SL Hit We will move our Straddle Upward.
 Below Explaining the Return on this Strategy.
Return on
Weekly Annual
Total
Allocation Return Return
Risk Investment

25% Moderate
0.66% 36% 9%
Note: The Return on Total Investment is calculate based on 1 CR capital.
The Return we are taking less based on Variable Return of each Investment Strategy
Investment Strategy -Modal 1 (Vix 10~20)
Continue…
 4.1)Nifty Straddle with Hedge Pay Off Diagram
 Investment Strategy -Modal 1 (Vix 10~20)

 4.2) Expiry Trading:

 In this expiry trading we will play on both Nifty & Bank Nifty.
 We have develop our own technique to identify the strike price which going to be zero.
 Our Stop loss is 3 times the premium we are selling or 2% of the total Capital allocation.
 In expiry trading we sell up to 3 strike & Start our expiry trading after 11:30 Am-12 Pm by studying the trend.
 Our Accuracy on Expiry Trading is 90% & for live demo we can share screen to You all on AnyDesk or Team Viewer &
can view how we play the expiry trading in Bank Nifty & Nifty.
 Next slide we will Explain the Technique we use for Expiry Trading.
Return on
Weekly Annual
Total
Allocation Return Return
Risk Investment

25% High
1% 54% 13.5%
Note: The Return on Total Investment is calculate based on 1 CR capital.
The Return we are taking less based on Variable Return of each Investment Strategy
Week 18-Jun-2020(Bank Nifty)
• In This Expiry Trading we give Weightage to many indicator like.
• Based on the Weightage we sell far strike of premium less than 10.
• We check Indicator weightage on every 30 min & Change our
position.
Sr.No Indicator Weightage
1 Renko 15%
2 Technical Indicator 15%
3 Open Interest 25%
4 15 Min Candle Stick 10%
5 OI Addition From Morning 15%
6 CrossOver 10%
Total 100%
 Investment Strategy -Modal 1 (Vix 10~20)

 4.3) Stock Put Sell:

 In the Stock Put sell we sell the good quality top 5 Nifty Stock put option.
 We sell far 15-20% Put monthly premium of good quality stock.
 We are ready to take Delivery if expiry happen below of the Put Option we sold.

Return on
Weekly Annual
Total
Allocation Return Return
Risk Investment

25% High
0.19% 10% 2.5%

Note: The Return on Total Investment is calculate based on 1 CR capital.

The Return we are taking less based on Variable Return of each Investment Strategy
 Investment Strategy -Modal 2 (Vix 20~30)

 5.1) Call Spread Monthly Option:

 In this Strategy we sell far Call Spread of Monthly Option Generally 8-10% above of Current Spot level.
 We open the Option before 45 days of expiry & close once we get 3 % of Profit or 2 week before expiry.
 Downside risk is negligible & if upside risk SL hit we again open far 8-10% far Call Spread Option.
 In this spread we do current month Sell far 8% -10% call option & hedge with next 8-10% other month buy call option.
 We get Both benefit of Theta & Vega.
 Pay off Diagram Explain in next slide

Return on
Weekly Annual
Total
Allocation Return Return
Risk Investment

25% Moderate
0.66% 36% 9%
Note: The Return on Total Investment is calculate based on 1 CR capital.
The Return we are taking less based on Variable Return of each Investment Strategy
Investment Strategy -Modal 1 (Vix 10~20)
Continue…
 5.1)Call Spread Monthly Option Pay Off Diagram.
Investment Strategy -Modal 2 (Vix 20~30)

 5.2) Expiry Trading & Stock Put Sell:

 Same Strategy we follow for Modal 2 Strategy of Vix range.
 Return & Risk has been defined in Slide 9 & 11.
 If there is an violently increase in vix after the position we have taken we book partially profit & move to Model 3 of
Strategy .
 Last slide we will cover whole 3 Model total ROI on capital by summing up whole investment strategy.
Investment Strategy -Modal 3 (Vix 30~50)

 5.2) Call Spread Monthly Option & Expiry Trading:

 Same Strategy we follow for Modal 3 Strategy of Vix range.
 Return & Risk has been defined in Slide 9 & 12.
 We just allocate only 15% of capital on each strategy to make we safe our capital is protected.
 We Change our Strategy based on the VIX value if reduced by booking partial profit.
 Next slide we will cover whole 3 Model total ROI on capital by summing up whole investment strategy.
 3 Modal Total ROI on Total Capital.

Model 1 (Vix 10~20) Model 2 (Vix 20~30) Model 3 (Vix 30~50)

Weekly Annual Return on Weekly Annual Return on

Weekly Annual Return on
Sr.No Strategy Equity/Debt Allocation Return Return Investment Sr.No Strategy Equity/Debt Allocation Return Return Investment
Sr.No Strategy Equity/Debt Allocation Return Return Investment
Call Spread with
1 Nifty Straddle Hedge Equity 25% 0.66% 36% 9.00% 1 Monthly Option Equity 25% 0.66% 36% 9.00% Call Spread with
1 Monthly Option Equity 20% 0.66% 36% 7.20%
Expiry Trading(Nifty & Expiry Trading(Nifty &
2 BankNifty) Equity 25% 1.00% 54% 13.50% 2 BankNifty) Equity 25% 1.00% 54% 13.50% Expiry Trading(Nifty &
2 BankNifty) Equity 20% 1.00% 54% 10.80%
3 Stock Put Sell Equity 25% 0.19% 10% 2.50% 3 Stock Put Sell Equity 25% 0.19% 10% 2.50%
3 Bond Debt 18% Nil 6% 1.10%
4 Bond Debt 18% Nil 6% 1.10% 4 Bond Debt 18% Nil 6% 1.10%

4 FD Debt 18% Nil 6% 1.10%

5 FD Debt 18% Nil 6% 1.10% 5 FD Debt 18% Nil 6% 1.10%

6 Reserve Bank Cash Liquid 60% Nil 3% 1.80% 6 Reserve Bank Cash Liquid 60% Nil 3% 1.80% 5 Reserve Bank Cash Liquid 60% Nil 3% 1.80%
Total Return on Investment 29.00% Total Return on Investment 29.00% Total Return on Investment 22.00%

Note: The Return on Total Investment is calculate based on 1 CR capital.

The Total Return displayed is not actual it may vary +-5% from the total Return displayed for each capital.
We can’t expect one modal strategy to run for entire year it may change based on Vix Range.
THANKING YOU