Best ARBITRAGE Trade - 25% ROI with 0 RISK!
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- เผยแพร่เมื่อ 29 ส.ค. 2024
- Best ARBITRAGE Trade - 25% ROI with 0 RISK!
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#arbitrage
Sir you forgot to count every month roll over cost which include brokerage and mcx trasaction charges
Secondly if gold price increases 15 to 20 pct or even more over the period of time then our short gold position will show loss of 10 lakh or more for which exchange will demand more money in order to maintain the position.
No 30% return on total 50L.
45L of SGB will generate 2.5% + some additional % as SGB are traded at discount. Remaining 5L will generate 30% with assumption of 125+ points of credit every month.
Overall return is around 6-7% on 50L which is same as debt fund return.
What is long term return on Gold?
you are correct bro its around 7% return strategy
sgbs are at discount while buying but they may be also at discount from cash market rate at the time of maturity,, then this benefit would not be possible..
@@ajaydesai4544 usually No, it would almost market price of the Gold, you can check any sgb which is near to expiry n compare with market price of gold
Pagal bana raha h yeh, 50 lakh me se 45 lakh to 4 % hi denge.
Thanks first my guruji you are great You opened a way to think deeply . When we calculate the total ROCE, of 50L it gives only 3 percentage from the mcx trade and 2.5+1.5 percentage form the sgb benefits ( total 7 percent annual) the person is able to generate additional fd returns through risk free etf and liquidbees or trading income From the remaining 40L pledged margin thus msay work thanks genius
Can this remaining 4 lakh be used for buying bees also or only f&o trades?
I am making a platform where u can get 15-20 percent return guarantee if anyone wants to know more reply in this chat i will give the group link
@@rajeevarora2791 f&o only
This video needs to be seen by every one in India and should be seen twice atleast to understand
Great content lot to learn ,just one rectification 50l margin we r making 3%, not 31% on 5L...
40 lakh margin is left with you to trade in f&o. Shorting fut requires 5 lakh only and by using the 5 lakh you are earning 1.5 lakh
@@venki493 and by doing this you lost gold returns also which will be more than 1.5 L
1.5 L on 50 L is 3 percent
Gold cagr is 8 perfect
So it is a sure shot nonsense strategy
One can short 9 lot with entire 45lakhs, so that the returns will be 15lakhs per annum, am i right?
1) Shorting the Future is fine; but if gold price increase....I need to pay for the loss immediately. isnt it? how is it a no risk? we are holding gold for long term isnt? 2) Can this be replicated for index funds? purchase index funds and sell call options
This is absolute BS. the paper bond has no gold to back up! dont fall for all this big returns. Just invest in Index fund
Sometimes futures mightbe at discount and at premium. As a Math teacher I think you are very good at calculating these complex things but for a layman its difficult to do this.
You don’t need to buy at that time..🤔
In that case you can avoid Future Short instead you go for Put Buying to secure ur Base Trade. And If you think the Discounting is intermediate go for selling OTM Call option. Doing all this you need to have Edge.
i have no idea what he tell. I just like the fact that this video is related to gold, that's it.😃
@@ImranShaikh-ts3nq put ka price bhi bhai future se aata hai spot se nahi
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Gold component 50 L*(2.5+1.5)% = 2 L
Future shorting = 1.56 L
3.56 L on 50 L 7.12 % return
SGB or bharat bond can easily give such returns so what is the logic to do all this
Also no Gold returns as in future we get loss
👌🏼.
Thanks Sundarji. Fantastic.
Your exploration of risk free high ROIs are mind boggling.
One need to learn the attitude from the successful people before learning the methods. I’m fan of that in you.
sastha nasah....
I am making a platform where u can get 15-20 percent return guarantee if anyone wants to know more reply in this chat i will give the group link
Hi sir calculation is absolutely wrong.
We can get only 6 to 7% return on 50 lacs, which is almost similar to FD where there is no knowledge is required, but here we need to take so many steps and knowledge.
Anyhow thanks for giving this kind of knowledge at least, where nobody is sharing this kind of information also..
1.5 L every 2 months from MCX not every year
Sir, in zerodha u need seperate margin for mcx. So collateral in NSE segment can't be used in mcx to short gold futures 🙏
2.5% SGB interest + 1.5% discount + 3% through gold furure ( 31% on 5Lakh so its just 3% on 50lakh) so total return will be just 7% and not 25%.
7 % good
Absolutely right
Then trade with 40 lakh
@@rishibajari you can already get 7 % from government bonds without so much money juggling.
@@droidgamer12 arre Bhai Jo bache hue 40 lakh hai unse sir trading karte hai options mein . Jisse baaki ka amount ban jaata hai .
I have been trading in SGB for past 1 year after your video the volume is increased by 10 folds
Really you opened eyes of many
Now it is trading near to market price
Great awareness to general public 👏 👍
I am making a platform where u can get 15-20 percent return guarantee if anyone wants to know more reply in this chat i will give the group link
One simple question
Assume I short gold but gold price increase beyond the premium, so I have to square off and pay the loss right ?
if the gold price increases so i think you will gain in SGB future.... i guess so sir.... i am new in this
You need keep cash for DD. if the DD was 10 Lacs then you need to keep 10L cash in broker account for that
@@harsh-bm4wx Actual gold price will not reflect in SGB's always , only New/Expiry SGB only tied to real gold price, remaining other SGB's will be listed on discount / premium. It depends. I have 8 series of gold SGB's. trading volume also very less. It's not possible to buy same price in SGB like stocks in bulk, huge difference will be there if you see the depth. Theoretically you will find arbitrage but practically bit difficult.
My investment is 50 lac, 2.5 % interest from GOI, 1.5 % discount difference, and 150000 income from mcx , which is not 31% but only 3%, you are calculating on 5 lakh margin, whereas i am giving entire 50 lakh worth gold as margin, sir please re calculate
P R Sundar, please recalculate
The amount of Rs1.5L is for per month and if you calculate per annum it turns to be 36%...
3% is every month
The title is just a click bait.
Than it will be additional risk not zero risk
important thing is missed SGB matures only by sept 29, what if market goes up shorted future will be in loss so while settling and roling over you need to incur loss and open new position how can we address this
The technique is nice sir, but what am concerned about is rolling the futures position quarter on quarter let’s say with loss if gold price constantly increases, I’ll have to finance the losses of futures in cash as the 2029 contract of SGB would not be liquid and will not catch up the actual gold price as well.
I also like to know what should we do in case of market goes up for long time
I have the same question
You are not buying the 2029 futures contract. Please watch the video carefully. But let me tell you that there is no free lunch in this world.
To add to your point, if you carry the loss for next 8 year it will nullify most or all of the gold appreciation gain.
This is equal to buying SB today at the price of gold after 8 years.
@@rajatmin Sorry for late reply, we are indeed buying 2029 SGB and shorting Gold commodity which is 2 months ahead of us. Yes there is no free lunch I agree, the SGB keeps gaining no doubt but financing the losses time and over again is a difficulty.
Moreover, shorting commodity at a premium is not a possibility always. Sometimes futures may trade at a discount too, it all depends on speculation. Anyways, let's wait to hear from sir, he usually replies but this might have not got his attention.
A covered call strategy explained in a complex way by Mr. Sundar. His intentions may be good but there is nothing new in this strategy. What will happen if the gold futures increase one month and drop the next month. Do we have to cover the loss either by cash or by liquidating the gold bonds and wait for a fall again?? If so, what is new in this strategy?
i also have this question. Can some one explain better if we are missing something. if there is no loss and 25% profit then this is the best
but if we earn 30% on 5 lac it only means we earn 3% on 50 lacs so 4+3 its only about 7%
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same Things i can do it in stock. which gave much more return than that...So why i do this in GOLD.. Need more clarity on it.
by calculation , people can be fooled...so he did so..one is investing 50 L in gold bond plus 5 L in gold futures as margin money....earning 4 % on gold bond ie. 2 L in this case 1.5 L in futures so total becomes 3.5 on investment of 55L .....so calculate annual returns...
As we know that gold has a power of appreciation in long term. Why should short futures. I agree its margin fund can be utilised to buy gold fut and short covered call per month. Passive income could generate easily 15-20%.
the idea is to capitalise the futures premium..
If gold price increases, your shorted position will make a loss. You cannot say you have bought SGB the price of that also increased, because it is pledged and you cannot sell it immediately and plan to make profit from it. With lock in period of 8 years, many such scenarios the outcome (ROI) would be pretty poor I guess. I am right?!
Totally agree, there's a loop hole in the strategy which didn't consider scenarios of gold price increases for which short loss needs to be covered in mcx. SGB won't help here to cover up.
Sir, If you short gold 1kg, you need to pay to Broker if market shoots up, then we can't sell gold bonds to cover the losses right. You will be go on paying losses if market/gold price drastically goesup, please clarify
Seems like a taxation nightmare. Profit/loss on gold bold to be paid in 2027
P/L on futures selling and put selling to be paid each year.
you buy 5lakh rs sgb you pledge with broker you will get 4.5 lakhs now you short otm gold option ce you will get premium now also buy goldbees equivalent to delta of option if market falls delta will fall reduce goldbees according if market rise buy more goldbees as per increase in delta keep delta neutral
To all friends. He is right and wrong. He has not done this himself. Go watch LTCM and MG failures. Rolling contract has cashflow risk. His original long 2029 position is surely hedged but the intermediate rolling futures short will ask for liquid margin. His other option selling ( PUT) is a dangerous proposition. It’s practically naked… as the short future hedges the cash long the short put will bleed him and ask for more margin.
This position altogether may not earn even 3%
Sir, the profit is 156000 for 5 lakhs, you are showing this as 31%. But I have invest 50lakhs. For 50 lakhs if its 156000 ?? Its 3%. Am I missing something?
On 50 Lac capital total annual return would be 6-7 percent only . What he is telling 24 percent that is only on 5 Lac rupees . But since your 50 Lac capital is blocked , you have to calculate return on 50 L capital only. Do not get fooled . Better go for Mutual funds , that will will give u more than 12 percent return on your total capital invested .
If you buy 10 qty of goldm future the charges is 825 rs. Also if you buy 10 qty of sgb the charges are 825rs. This is not shown in the video
In all practicality you would need much more funds to sustain your trade strategy over the long term of maturity of the SGBs
i agree. assume the gold price double we need to have that much capital to cover losses in gold futures. Am correct
@@sivasankara1174 That is true, to add to your point, if you carry the loss for next 8 year it will nullify most or all of the gold appreciation gain. This is equal to buying SB today at the price of gold after 8 years.
What is he talking here. the next series Rs.150 profit depends on the market situation. A lot of time it will be a loss. Today it is trading 150 lower. But when you actually switch before expiry it could be completely different. Can he show historical data to prove it. Being a such a big F&O trader he should be completely aware of this.
In actual practice it's just like a covered call, with no returns
What happens if future price goes up, possibility to lose in future trade???
Do you mean we give delivery of bonds to brocker at higer price to compensate the future loss??
Keep rolling future to next series
Instead of selling futures, one can sell only call option making it a covered call. Returns would be minimal compared to futures but there are many advantages. If gold appreciates gradually (sell far OTM call option only) one can get good profit from bond.
For arguments sake, lets say if all covered calls end up in losses? Will we keep booking losses and only at the end of the SGB tenure we will realize the profits? (covered calls expire in 2 / 3 months, so the P/L will be realized in 2/3months) whereas SGB will expire in 6-8 years so the P/L will be notional until we book it?
@@benm3926 Yes. Notional loss has to be booked. Same with the case of Future. But here every month you will get an opportunity to slightly increase your strike price. In 5 years time you can increase your strike from say 5000 to 6000. Then 20% profit or 4% extra return you may get. In case of Future you locked your price on that day.
You can even use Secured Put 😅 why covered call
@@viki_sky007 Don't get you. If you already have SGB, why do you have to do secured put?
I also intend to do the same but have kept from doing so because the buy-sell quotes of options are way apart;
Please advise, Sir.
Horrible horrible strategy.
Firstly, if gold price increases significantly in a particular month, then you have to liquidate SGB to offset losses in futures price. In that case, you lose 2.5% interest as you are selling SGBs in secondary markets.
So essentially you can't count 2.5% interest from govt. as it is only applicable if held in primary market, until maturity
Secondly, 2.5% interest from govt. is taxable. There is no LTCG tax on SGBs, but tax is applicable on 2.5% interest
One correction:
2.5% is paid twice a year 1.25% every 6 months.
FD 6% is best, No complicated things, No hidden expenses, Keep it simple
PR should replace the whole technical team. This video has echos. He should stop hiring his relatives but go for professionals after watching others good videos.
I don’t know about indian market profits with all the tax, but dubai and all they do it profitably, going long on sovereign gold and short on gold bees type
PV of 25% inclusive of 2.5% after 8 years at 6% rf gives negative return.
Completely false data..
SGB trades at Mkt price - GST you will get same way in 2029 also.
You no way get 1KG gold physical at 48L through SGB
You opened a way to think differently. Thank you for that. When we calculate the total ROCE, of 5000k it gives only 3 percentage from the mcx trade and 4 percentage form the sgb benefits ( total 7 percent annual). If the person is able to generate other trading income from the remaining 4000k pledged margin it will work well. But it will be under risk. Am I right?
No risk as SB is considered as cash equivalent...so even if gold future shoots....Value of SB will also shoot which is equal to cash only so no need to pay extra margin
But yes returns are not more than 7% annually
@@Ashish-vd1ev as gold prices increase, sgb price won't rise instantaneously. SGB price matches gold market price only when bond matures after 8 years. If gold prices rise, future sell position will give immediate losses, while there won't be instant proportionate rise in the bond price. This might only work if one is committed to hold the bonds and then trade with margin money for 8 years at the least is what i believe. Open to comments. Thanks !
Carefully look at his calculation, it is totally wrong. He multiplying by 10 where future value already in 10 gm.
I am making a platform where u can get 15-20 percent return guarantee if anyone wants to know more reply in this chat i will give the group link
illiquidity is main problem. it generates slippage. so it looks good in Excel but not practical
if gold keeps rising then how does rollover difference on MCX become profite or gains if one is shorting unless it comes down?? 😅
sahi pakda yar
Sale put option every month
Instead simply buy oct month future and sell dec month future..but you can never be risk free as the future price may go below the underlying asset's price!
You should see the price of 22 carat gold which is pure gold (you can't prepare the ornaments)
Whereas the 24 carat is made my adding 2 parts of copper to gold (can be used to make ornaments)
So, you just bought the 22 carat gold not the 24 carat gold..
Once cross check
Thank you Sunder Sir... After a very long time I have liked your video as a new learning video on strategic trading has come from you. I have been seeing your videos since 2020 and have learnt many new things from your videos, but these days I am not tempted to like your videos. Thank you Sir once again. I have seen the video once, but I will surely want to learn more on the strategy you have discussed and so will see the video again. 1 question, instead of shorting futures will it not be better to short synthetic futures to save on the charges...will the Rs.130 advantage still be there then??
u won't have to obligate mtm requirements with synthetic futures but that extra premium he is looking for may not be there
@@CuriousKnight-Wrestlecurious Yes, the daily Futures MTM will go away and the charges will be reduced, but since synthetic futures exactly match futures pay-off (otherwise there will be an arbitrage opportunity there as well) I think the 130 bucks PRS Sir is talking about will stay.... and yes 1 more thing, option sell positions can always be adjusted using the additional free marging available...
Are there same transaction and tax charging for shorting a future as there is for going long on a future?
Excellent. Awesome. Explained Very nicely, how to use Financial IQ to make Risk Free Money without breaking any rules. Keep up the Good Work. - Rao, Bangalore.
Sir, can you please make a separate video on pledging of any of the security. As in stocks we get collateral margin which we can use only 50% in margin of F&O. But if we pledge SGB or Liquid Mutual Fund then will we get 100 % cash equivalents margin?
My actual question is, suppose I pledge worth Rs 1 lakh liquid mutual fund or SGB. Now I want to Sale an option of nifty and the total margin required is Rs 80k. Then this pledged liquid fund is enough or again we have to pay 40k additional cash margin?
With haircut you will get 90k cash collateral to trade.
Sir, you didn't explain the other side of the story, if Gold price increases continuously you will miss the incremental profit on your investment..as you are booking loss in Gold future...
Yes 💯 i was thinking the same
Isn't that hedging? You avoid losses.
I have one question if anybody could help me out it would really be helpful.
Once you buy the bond and short future, both are in different markets right. The arbitrage works only if you can square up one using another but that is not the case. The shorted future should also be squared up in the futures market and the SGB should also be sold on expiry. So where exactly is the arbitrage taking place.
Yes, i have the same query here. But if we keep continue in selling futures we may end up with profit though less than 30 perc. But I dont think its great trade , putting heavy value in gold and getting jus 1.5 lacs for that 50 lacs investment ( otherwise you use other margin left out used in other trades !! )
Moreover, if the gold prices double then even the margin required to sell futures would also double. So what what happens then?
@@vallabhv6725 well it's not possible to happen in one month as many economies depend upon gold. so, every month you would be able to reset the cycle. even if the price increases by 10-20% you decrease the amount of gold from 1kg to 0.9-0.8kg and you are okay to go with your 50L capital for new month. I hope it helps.
@@vallabhv6725 You would receive 45 Lakhs after pledging 1kg Gold bond, 5 lakhs used for margin and remaining for offsetting the losses or trading different instruments.
Hi Mr Sundar, Very nice information. However please also explain the impact of various taxes, Brokerage, transactions costs also. After providing for such costs, what is the possible actual return. Incase you can do this, that would add tremendous value!
I am making a platform where u can get 15-20 percent return guarantee if anyone wants to know more reply in this chat i will give the group link
Once again PRS sir proved himself as that he is first teacher then he trader!
But for future we need to pay extra cash every month and our sgb money is only a virtual increase in money. So if gold keeps rising I need to have the mtm money also.
Use synthetic future
If gold prices rises your margin money will also increase. Many brokers offer a 8% haircut. So dontworry. You will get 92% of gold value as margin. You dont need extra money anytime
@@MrUpendra7 dude you have to pay the mtm money as the mcx trade you're booking loss every month n sgb money is only a virtual increase
I am making a platform where u can get 15-20 percent return guarantee if anyone wants to know more reply in this chat i will give the group link
Thanks for the good video sir. But i think its not applicable on NRIs considering the restrictions on SGB and Commodities for NRIs.
On expiry if the future position is in loss, then this ROI would be low. But if we keep continue in selling futures we may end up with profit though less than 30 perc. But I dont think its great trade , putting heavy value in gold and getting jus 1.5 lacs for that 50 lacs investment ( unless otherwise you use other margin left out used in other trades !! )
Gold may not give more than 6% p.a in longer term, as per history
@P R Sundar Sir, I have one doubt. Lets assume all the futures we short keeps giving us losses (that is gold futures keep increasing). So will we keep booking losses and only at the end of the SGB tenure we can book profits? I understand we can sell SGB in the secondary market before the tenure but that is taxable, whereas selling at end of tenure is not taxable. Please clarify
Exactly
Remaing money received could be used for offsetting the losses. You would receive 45 Lakhs after pledging 1kg Gold bond, 5 lakhs used for margin and remaining for offsetting the losses or trading different instruments.
The risk is, if the good future price goes up few months up and few months down, then that is the risk. Because we book loss in future when gold future goes up and the actual gold price is nutral after few months or years
@@sreekanthkona1576 You will book profit in Futures when the Gold price go down
Good question
And everytime when there’s a loss in MCX..We have to sell the SGBs?
Cash out flows are a big problem when gold price is increasing as we shorted futures
How can one be sure that switching from one future series to other will always be profitable?
If shorting future gives negetive return sell the gold bond and future simultaneously .but SGB is not so liquid .
How do we get 156000 profit in futures? Can you explain ....half baked information and misleading ...
thank u so much. Honestly speaking u r a genius.
in mcx for shorting 10g gold future. margin is 477000rs
u r saying 5lac for 1kg gold. how??
struggled
You're right. I also checked. In fact we need to pay full pledged margin of 50 lakh for 1 Kg. And the return is much lesser comparing with Nifty or BNF option selling. Also with gold the risk is high if the gold price shoot up we need to sell and buy new SGB.
Your starting music is very noisy. Kindly remove it. It doesn't go with your personality either. Thanks.
The broker will charge interest on the 45L margin. How do you address this issue? @P R Sundar
sir your calculation wrong please recheck 1560 pft not 10 gm its 100 gm and in 1kg pft is 15600 onnly please re chechk
If price goes up future short must be realised Lose but SGB is unrealised Profit. So you have to be shot every 2 month in to be in break even. However charges are loss only .
finally i can beat warren buffet 😄 25% is huge per annum !
I am making a platform where u can get 15-20 percent return guarantee if anyone wants to know more reply in this chat i will give the group link
Berkshire hathway returns is 30X return… with brokerage and tax…. Double the capital in 3 Years…
@@ShaKing_037 it's not 30x it's 30 percent, x denotes times multiply
@@sourabh4033 got it bro..just curiosity😂😂😂
120 saal jinda kiase rhoge ,compounding ke liye
That is really STUPID music at the beginning. So is the cameraman who picturized Sundars home.
Great knowledgeable content...
Please make an video...on public comments received.
So that the concept is more clear.
Thanks
Really today I learnt an awesome topic 🙏
In my view his strategy will give u around 5-7% profit on 50 lakh....and along with u will get approx 35-40 lakh rs margin money....now with this margin money how much Profit/Loss u will make its depends on ur skill set
So we can't say its 25-30% risk free arbitrage startegy....bcz additional returns with margin money has its own risks also
but drawback is if 50k gold price reaches to 1 lac price for 1 kg in coming years thn u don't get capital appreciation benefit bcz of future sell
I hv a better Opinion in this, u just need to buy SGB and u will get around minimum 6-8% CAGR in 8-10 years as per historical Gold data and u will also get complementary ( 2.5 % interest every year and 1.5% price discount)
And after that pledge that SGB and now u hv 45 lac cash in ur demat for trading.....do whatever with that fund with safe strategies and earn as maximum as u can
Mtm losses will be difficult to manage unless u have more funds in cash with your broker
you can use synthetic future instead of future
While calculating he multiplied 130X12X100=156000. This is wrong. Considering 45 lac margin one can trade only 9 lots so earning will be 15600. Moreover, if you are in sort for 9 lot then you are sort for 9kg gold but long for one kg gold, which is dangerous. plus he has not considered expenses involved in future sales and buy-in every month.
1) with 5 lakhs captial, it is very unlikely to get 25 percentage return. Let's consider Zerodha broker, They charge 18% interest on collateral bonds/ shares. Let's say I bought 100 Gm worth bonds, I gave it to Broker as collateral , he will charge 18% capital. I am going to use. As per Zerodha they won't charge any interest if your user uses less than 50% of collateral .So in this case I have to use 250000 without any interest. Let's say we need an additional 2.5 lakhs to escape from interest. Total 7.5 lakhs minimum amount required. While providing information please provide complete details.
Overall return is not 25% p.a ..it's just 7 %.....return on mcx hedging is just 3 % on overall value
I was in profit but after watching this video I'm in huge losses now.
discount on sgb etf is because of long term sgb tax benefit. what you'll gain with arbitrage you'll lose from capital gains tax of etf and oppurtunity cost of haircut
The title is a click bait. We don't get 25% on investment, you get 25% on the margin money you deploying.
Brokers are changing 1.5 percent intrest for pledging, what about intrest
For pledging no interest only for mtf facility interest will be there. Try kotak securities
Sir we need to calculate returns for Rs 50L not for 5L.margin money...Total 31% return PA for 5L.not for total investment 50L..Correct me if I'm wrong
Thank you sir. YOU ARE A LEGEND FOR OUR REATIL TRADER.
what happens if gold increases by 10 per-cent, then your principal amount will not give anything, I want to know that bond also increases 10 percent likewise shorting the future..
Can some one explain how the profit is generated by closing oct future and then shorting dec future
Total capital deoloyed is 50L
Return from MCX = 1.56L ~3%
SGB interest = 2.5%
Max 6-7% on actual capital deployed.
Doesn't seem 25%-30%
sir
we realize loss in fut and shifted to anther
but proft not relized in SGB at the same time in order to compensate
And still so many doubts sir
Yes that is correct
At maturity sgb adjusted with future price. For example if you are making a loss of 10k pm on consistent basis because of increase in gold price, the loss will be compensated by sgb at maturity.
@@vijayakumarkotikalapudi7876
For example
Few months before nifty @18000+
Went to 15200and again
Now back to high. So flat return in these months if not relized in between
How does reccuring period loss compenseted by long term meturity bond
idea is good, but SGB has tracking error with actual gold. GOLDBEES has lower TE.
USDT arbitrage is more quick easy & profitable but i dont say ur process is useless or waste.....just a suggestion.
Don't we need to pay the amount we lose (if gold prices shoot up) by shorting gold futures?
obviously yes, that is called notional loss, In future you will be having notional loss and SGB you will be having notional profit so np, you should have extra fund to manage that
how to exit the trade ,if the gold price goes higher ?
Is it negative 25%
Our inflation is 8% but u have given a plan of 2.5+1.5 and 30% on 10% capital which is 5 lakh..... total 4%+3%=7% only.
What will be the other side if the trades gone wrong.
but sir the remaining collateral amount cannot be used in equity
Committing 50L to earn 7% in illiquid product. Taxable at 30%. Needs constant rolling.
Poor choice of title for the video
Your calculation totally wrong for the first time, please reupload your video to avoid loss,
1. Shorting 52k future is equivalent to 10gm. So hardly we will make 150 per month for 10gm not 1500.
2. The money blocked for gold trade 50 lakhs.. Please calculated the return for 50+5lakh not simply 5 lakhs.
C’mon if this was the case there are plenty of traders in the market, they would’ve simply made easy money with this. Plus, also note down there is a premium decay while you’re nearing expiry. Hence, the premium is not fixed sometimes you gain higher premium and sometimes you might also lose in premium it depends on market volatility.
I pretty sure you may not end up making more than 12 - 15%
In the end the calculation is 136 x 100
Because the 136 premium is for 10 gms price and one Gold contract consist of 100 units 10gms x 100 = 1000gms
So you would end up only making 13600 Rs in premium money every month, in Mr. PR Sundar’s fixed premium world
Not a troll, only giving the right information.
I invest and track SGBs closely. There is a lot of difference between price of SGB and street price of gold. You will never be able to buy physical gold at the price declared by IBJA (SGB follow IBJA rate at maturity). Also, you get cash, not physicall gold on maturity. Wherease in mcx you have to give delivery of physical gold. So it is not like a covered call.
are you saying that at maturity (SGB) I will not get the market price of gold?
@@sunilmakhija5819 You will. but what is the definition of market price? For SGB it is the price declared by IBJA on that day. IBJA prices are usually lower than what you have to pay jweller to buy gold.
Sir, you are genius. What a concept. My respect to you.
Dear Sir, In Zerodha u cannot trade in MCX F&O with collateral... It is limited to equity and currency... It is written on there website... Thankyou
Yours sincere follower
Actual return on 50 lacs works out to be 7.12% which is fair enough for an options trader getting extra return but then there is hassle in this
1. Liquidity risk: if gold price shoots then there will be loss in futures and to cover that loss you have to pump in additional cash co futures are always marked to market.
2. Slippages while rolling over the futures which will eat away atleast .5% of return.
3. Its a very long term thing since sgb will expire after many years and even if once a person forgets to rollover the position by even 1 day, the loss may be huge due to slippage.
Better to stay invested in liquidbees giving hassle free 4-5% return?
liquid bees bees gave less than 3 % right last year