DERIVATES TRADING STRATEGIES DAILY RECOMENDATION OFFERING

Sandeep Nene

SALIENT FEATURES CAGR of over 50% in 6 years April 2007 to

March 2013 Low Trading time Required maximum half an

hour per day Two Options:

Profit Sharing - Fees Charged as a %age of cumulative profit earned

Fixed Fee – Fees Charged in Advance for recommendation email

Needs Regular funds blockage of Rs 3 L / 1L (1 contract each), based on strategy selected

Performance of strategy tested over 6 Years of Back testing

STRATEGY A combination of moving averages, trending

indicators and a combination of innovative stop losses to let profits run longer and cut losses quickly

Avoids Overtrading

WHO IS IT FOR ? For professionals who want to trade in F&O

but only have half an hour in a day to spare for trading

Specifically 9.15 a.m. to 9.45 a.m. Every day

SPECIFICATIONS

A trading account with the F&O segment activated is required

Strategies will be emailed before 7.30 a.m. the day of the trading

The suggested position needs to be taken between 9.15 to 9.30 a.m. Everyday or between 3.00 to 3.30 p.m. On expiry day

Profits will be charged as consultancy charges based on option selected

BACKTESTING HIGHLIGHTS

Average Investment – Rs 1 - 3 L (Based on Strategy Selected)

Person Starting with funds of Rs 3 L on 1st April 2007 would have ended with Rs 18 L on 31st March 2013

FY % Profits2007-8 38%2008-9 53%2009-10 50%2010-11 62%2011-12 218%2012-13 113%CAGR 61%

BACKTESTING HIGHLIGHTS ...... CONTD

Profit Months % > 5% 46 64< -5 % 13 18Other 13 18Total 72 100

STATS MonthlyMAX 142%MIN -45%MEDIAN 7%AVERAGE 11%

y = 0.5532x - 3.795R² = 0.6938

-10.00

-5.00

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5.00

10.00

15.00

20.00

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

Avg Profit%

Avg Profit% Linear (Avg Profit%)

Position Open - No of Days

Avg Profit on Wins 9%Avg Loss on Losses -5%Avg Winning Trades 51%Avg Trades in a Year 93Win / Loss Ratio 1.9

THE MECHANICS Recommendations will be mailed daily

before 7.30 a.m. every morning , detailing the position to be taken: Future / Options; when Open / Close;

All Open time trades to be taken between 9:15 – 9:45

All Close time trades to be taken between 3:00 – 3:20

PROFIT SHARING OPTION

Based on Recommendation Open / Close Price will be Used

0.15% Brokerage for Futures and Rs 35 per contract for options will be deducted from profits to be calculated

The calculation of profit will be done for 1 contract This is irrespective of how many contracts you trade in –

0, 1, 3, 5, 10 etc. (thus you if don't execute a trade you will still be charged for 1 contract and if you trade 10 contracts you will still be charged for 1 contract)

20% of the above profits will be charged on and to be paid within 5 days after then end of F&O expiry date each month

ONE YEAR CALCULATIONS WITH FUTURES

MonthProfit Before

Brokerage Brokerage Net Profit InvestmentCumulative

ProfitConsultancy

FeesProfit After Cons Fees

Annualised Profit after Cons Fees

Feb-12 64,850 444 64,406 218,435 64,406 12,881 51,525 283%Mar-12 74,525 559 73,966 218,435 138,372 14,793 59,172 304%Apr-12 57,300 235 57,065 218,435 195,437 11,413 45,652 286%

May-12 54,069 876 53,193 218,435 248,629 10,639 42,554 273%Jun-12 37,256 708 36,549 218,435 285,178 7,310 29,239 251%Jul-12 13,750 69 13,681 218,435 298,859 2,736 10,945 219%

Aug-12 58,250 403 57,847 218,435 356,706 11,569 46,277 224%Sep-12 154,913 920 153,993 218,435 510,699 30,799 123,194 281%Oct-12 -4,400 422 -4,822 218,435 505,877 0 -4,822 246%

Nov-12 87,644 1,269 86,375 218,435 592,252 16,311 70,064 260%Dec-12 39,269 512 38,757 218,435 631,009 7,751 31,006 252%Jan-13 97,894 527 97,367 218,435 728,376 19,473 77,893 267%

Total 735,319 6,943 728,376 218,435 728,376 145,675 582,700 267%

ScenariosProfit after Brokerage Fees

Profit After Fees Investment Returns

1 Contracts 728,376 145,675 582,700 218,435 267%3 Contracts 2,185,127 145,675 2,039,452 655,305 311%5 Contracts 3,641,878 145,675 3,496,203 1,092,175 320%

ONE YEAR CALCULATIONS WITH OPTIONS

MonthProfit Before

Brokerage Brokerage Net Profit InvestmentCumulative

ProfitConsultancy

FeesProfit After Cons Fees

Annualised Profit after Cons Fees

Feb-12 45,563 630 44,933 71,934 44,933 8,987 35,946 600%Mar-12 31,288 350 30,938 71,934 75,870 6,188 24,750 506%Apr-12 21,775 280 21,495 71,934 97,365 4,299 17,196 433%

May-12 10,156 630 9,526 71,934 106,891 1,905 7,621 357%Jun-12 5,519 630 4,889 71,934 111,780 978 3,911 298%Jul-12 1,425 70 1,355 71,934 113,135 271 1,084 252%

Aug-12 21,663 630 21,033 71,934 134,168 4,207 16,826 256%Sep-12 110,556 770 109,786 71,934 243,954 21,957 87,829 407%Oct-12 -20,663 420 -21,083 71,934 222,871 0 -21,083 323%

Nov-12 72,581 980 71,601 71,934 294,473 10,104 61,498 393%Dec-12 8,775 350 8,425 71,934 302,898 1,685 6,740 367%Jan-13 63,831 490 63,341 71,934 366,239 12,668 50,673 407%

Total 372,469 6,230 366,239 71,934 366,239 73,248 292,991 407%

ScenariosProfit after Brokerage Fees

Profit After Fees Investment Returns

1 Contracts 366,239 73,248 292,991 71,934 407%3 Contracts 1,098,716 73,248 1,025,469 215,803 475%5 Contracts 1,831,194 73,248 1,757,946 359,672 489%

FIXED FEE OFFERING

For the fixed fee option, the fee will be collected in advance and is essentially is the fee to receive the recommendation for the period the fee is paid for

Period Mixed Strategy Only OptionsYearly 50,000 25,000 Semi Annualy 26,000 13,000 Quarterly 14,000 7,000 Monthly 5,000 2,500

GUIDELINES

The strategy needs to be executed at the times mentioned or it may not work

The strategy is based on 1 contract , one is free to trade more contracts, however the suggestion is to maintain uniformity, e.g. 5 contracts for all scrip's; don't use 1 contract for a certain trade and 5 for another

All recommendations should be executed for the strategies required

There will be losses and need to booked as and when suggested

DISCLAIMER’S

The strategy has been back tested for 6 years , however there is no guarantee that the next 6 years will work similar

There are no guaranteed returns provided in the offering

This is based on an appropriate mix of Futures and Options, an only options recommendation strategy can be provided but may result in lower returns

Sandeep.nene@gmail.com