General Trading Chat

[tradingstudent]

Have a nice weekend guys...

 

[Fundootrader]

Depends on the constituents of the debt fund. Recently, JP Morgan's debt fund took a big hit due to Amtek Auto's default on debt payments. Just look at D/E ratios of the constituents. If the ratios of the individual companies is high as compared to their respective industries, that should ring bells. You can also look at their default/payment history.

Corporate debt funds should give a higher yield than FDs, but highly likely that they wont be tax exempt. You should be looking at after tax returns to compare them. GSec based funds should be almost equal to or slightly less than FD's return.

I handled treasury of an Indian company for a very short period (didn't decide on where to put, just followed the process in place). Some of it was in risk free debt funds. Tax exempt yield was 5.9%-6.0%. The remainder was in FDs, with a before tax yield of 9.0%-9.5% (as far as I can recall), which was slightly higher than the debt fund. But debt funds give you the option of liquidity, which is not there in FD. So, higher price (lower yield) of the debt fund is the value of this option on liquidity.

Regarding Credit Opportunities Funds, this writer thinks it's not a good deal. You will be exposed to credit risk, as is the Amtek's case.

PS : I have personally never invested in one, but just sharing some opinions, which, oddly enough, violates my signature. Just thought maybe can give some pointers since nobody replied.

Few corrections -

a) Tax Exemption - All debt funds if held for more than 36 months can gain benefit of indexation - which lead to much lower taxation than FD if you are comparing 3 yr FD
- For shorter duration < 3 years, there is tax on debt funds

b) Risk & Duration - FD also has risk - in case of bank failure - you are entitled for max of 1 lakh irresptive of what you hold with bank - this is per account limit i believe

Debt funds are exposed not only to credit risk but also interest rate risk

But if you are looking at duration of 3 year & more - then these funds
are best as all the risks are contained - as these funds are primarily
based on accrual - i.e. coupon rate which is higher than FD rates

G-Sec's are more risky - as they fluctuate heavily with interest rate and dependent on whether fund holding them has betted on long duration or short duration G-Secs (duration impacts sensitivity of fund price with interest rate)

 

[timepass]

With all the discussion in the EW thread and then the bearish outlook in the P&F thread, here is more confusion from the oscillators.

BNF is already at a crucial level as per the fib levels. As for the oscillators, the ADX is showing bullishness, but RSI and stochs are equipoised and could either go bullish or form a divergence

as I said, more confusion from the oscillators, but one thing is clear - it's not the time to go short, maybe cautious longs or hold, but shorts are not yet warranted, not on EOD basis.

 

[naughtynifty50]

On Monday I am looking for min xx500 for BNF, holding xx200

 

[vagar11]

but 50+ ppl cannot open new ppf account right? as lock in is there..

You are right. Opening a ppf after 50+ wouldn't be a wise decision.

 

[naughtynifty50]

On Monday I am looking for around 800 for NF, holding 720
staying above 800/815 will result a good upmove.

 

[timepass]

but 50+ ppl cannot open new ppf account right? as lock in is there..

You are right. Opening a ppf after 50+ wouldn't be a wise decision.

Maybe unwise, but is it allowed ?

 

[WaveSurfer]

Who is the best person to discuss option strategies on this forum ?

 

[vagar11]

Maybe unwise, but is it allowed ?

There is no age limit.
Reference : http://www.bankofindia.co.in/pdf/PPFrules_14 .pdf

 

[naughtynifty50]

On Monday I am looking for around 800 for NF, holding 720
staying above 800/815 will result a good upmove.

Done done
ye lo bhaai subah subah hi 800 ho gaya aur 815 cross nahi kar paya :lol: