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If your portfolio was originally worth Rs.100, you shorted two index futures contracts at 50 and you had to post another Rs.15 of margin for futures (let us ssay). In 2 months time, if portfolio value is 90 and index futures contract is trading at 40. Then you lose Rs.10 on your portfolio and...

I am quoting from his paper: "In this 3-part series, we discuss how to hedge portfolios with derivatives. In this article we will discuss the basics of portfolio hedging with futures. The next article will cover portfolio hedging with options and the final article will elaborate on issues...

In my opinion, shorting futures (same face value as the market value of your portfolio) and rolling-over these contracts should work IF YOU ARE GOOD AT PICKING STOCKS. I write these words in caps coz if you make risky bets in your portfolio and they underperform the index by a big margin, then...

Futures are a lot easier to hedge with than options. If you are skilled at picking good stocks (i.e, over a peiod of 3to6m your stocks outperform the index), then shorting NIFTY futures should be perfectly fine. If however, one is risk-averse w.r.t margin calls etc, then they should be willing...

Today there are at least a dozen companies that I am tempted to buy. Valuations look great, some of these companies have outperformed analyst expectations and their peers. Examples: BHARTI AIRTEL, L&T, INFOSYS, ONMOBILE. But would I buy them today? No way. If the index falls by another 20%...