Best ARBITRAGE Trade - 25% ROI with 0 RISK!
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- Опубліковано 18 сер 2022
- Best ARBITRAGE Trade - 25% ROI with 0 RISK!
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#arbitrage
This video needs to be seen by every one in India and should be seen twice atleast to understand
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
Are there same transaction and tax charging for shorting a future as there is for going long on a future?
Although I don't know anything about trading and words like shorting gold, options trading, hedging, futures I heard first time. But the way you explained, was so clear.
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
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?
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
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
Nice video sir thanks for educating us each and every corner of market
Sir, in zerodha u need seperate margin for mcx. So collateral in NSE segment can't be used in mcx to short gold futures 🙏
In actual practice it's just like a covered call, with no returns
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.
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
Great knowledgeable content...
Please make an video...on public comments received.
So that the concept is more clear.
Thanks
Sir, you are genius. What a concept. My respect to you.
Thanks for the good video sir. But i think its not applicable on NRIs considering the restrictions on SGB and Commodities for NRIs.
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
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...
thank u so much. Honestly speaking u r a genius.
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 .
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
Great explanation. Thank you
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.
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.
Really today I learnt an awesome topic 🙏
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.
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
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.
Cash out flows are a big problem when gold price is increasing as we shorted futures
PV of 25% inclusive of 2.5% after 8 years at 6% rf gives negative return.
Thank you sir. YOU ARE A LEGEND FOR OUR REATIL TRADER.
interesting idea, I would consider
Once again PRS sir proved himself as that he is first teacher then he trader!
well explained by our beloved maths teacher
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?
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
and you sir give the advice to use vauld and vauld has been stoped all withdraw .now what to do?
Sir does the sgb price in sync with future value?
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.
But sir, you r showing two future contract primium difference at now while on expiring of Oct series (when will I shift my hedging in next month i e. Dec series) the price of dec series contract would having different price due to time decay, may be same, may be low... Please 🙏 clarify
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..
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 .
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.
Great content,,,,,,,,,,,,, Regards
What I do if mtm loss in mcx
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
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.
Can some one explain how the profit is generated by closing oct future and then shorting dec future
Can someone educate me At 12:00 min how come will get 130 points as profit when closing future and shorting next contract?
By end if current fut contract the next contract is also will trade same as current month?? Or that price difference will remain
Thanks very useful video
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
Marvelous PR by Sundar.
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
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
Sir please make this kind of vdos, so informative 💯
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%
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
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.
I was in profit but after watching this video I'm in huge losses now.
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!
Sir thank you very much... But most of the brokers have no knowledge of this...
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?!
much thanks sir for this masterpiece education valuable video 🙏🏻🙏🏻
Yes please tell anyone
Sir, How are we sure MCX gold price will keep on increasing by Rs 130 while shorting.
Sir, what if gold price keeps increasing. We need to pay in cash for the MTM losses right ?
Please clarify
Thank You
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
And everytime when there’s a loss in MCX..We have to sell the SGBs?
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
👌🏼.
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
What happens to gold futures when gold price shoot up? We need to square up shot ??
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
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
Do we get interest from Govt. even if we buy the SGB from open market? I thought we get interest only when we directly buy them from RBI
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
That is really STUPID music at the beginning. So is the cameraman who picturized Sundars home.
Nobody will explain like this 👌
Sgb have less liquidity how it compensates in futures loss?
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
Most intelligent man. I love u sir
but sir the remaining collateral amount cannot be used in equity
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
It will take time to digest....but worth it....
Your view on Index for sep 22
how to exit the trade ,if the gold price goes higher ?
Sir we were waiting for you yesterday 🙂
Can you share post market review for yesterday.. waiting for it
Thank you, sir
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.
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
Wonderful sir u only can find a way
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.
Very nice sir . Thank you
but what here u earn only investing soverign bond when price rises , u loose on future , everymonth if price keep on rising eveymonth ??
so after all future shorting benifit is only when price falls as u have to squre off future at every expiry !!
The title is a click bait. We don't get 25% on investment, you get 25% on the margin money you deploying.
Btw
2 of my trading platform (full time broker & Discounted broker ) doesn’t and will not allow pledge margin trade in commodity market
Please let us know which broker can give pledge margin for commodity
Can Lic bonds used as collateral
well done sir,thank your sir
1 kg gold in mcx lot size is 100 how to calculate 150 is 150000 ? gold m lot size is 20.
jb hum oct future ko square off karenge aur dec future ko short karenge to hume price difference ka fayda kese hoge
well explained