For all those who are following my handle on updates on Nifty Alpha/ Kotak Alpha, here is an update.
Today morning, my broker informed me that NSE has released a circular where it has specified "Member-wise permitted qty for FO segment" for various stocks/ ETFs.
Today morning, my broker informed me that NSE has released a circular where it has specified "Member-wise permitted qty for FO segment" for various stocks/ ETFs.
While the list of such stocks/ ETFs is very long, the relevant one for me was KotakAlpha. Look at the screenshot. What this means is that, each member (meaning: broker) will be allotted a certain qty and only to that extent will the shares be allowed to be used as a collateral
for FO segment. If you see the screenshot, the overall qty of KotakAlpha allotted to each broker is 58,282 shares. Which means, Choice Broking as a whole (my broker) can only report max 58,282 shares as collateral margin for FO segment across all its clients. Now the problem
is that, forget entire Choice Broking, I alone hold close to ~10L shares. Which means, even if I was the only client of Choice, I will be allowed to use only ~58k shares (out of my ~10L shares) as collateral for FO.
Since my idea has always been to use KotakAlpha as a
Since my idea has always been to use KotakAlpha as a
collateral for generating additional income thru FnO, this virtually makes KotakAlpha useless to me.
Therefore, with a heavy heart, I decided to exit KotakAlpha ETF and instead purchase the individual stocks of the Nifty Alpha index. Exited my entire KotakAlpha holding...booked
Therefore, with a heavy heart, I decided to exit KotakAlpha ETF and instead purchase the individual stocks of the Nifty Alpha index. Exited my entire KotakAlpha holding...booked
~23L of profit.
Will start buying underlying Nifty Alpha shares from Monday, and will then keep rebalancing them every quarter as soon as Nifty Alpha index undergoes rebalancing.
Will start buying underlying Nifty Alpha shares from Monday, and will then keep rebalancing them every quarter as soon as Nifty Alpha index undergoes rebalancing.
Completed buying of individual shares. However, didn't buy exactly the same shares as in Nifty Alpha. Instead, used the same concept, but with a slight change. Nifty Alpha picks the top 50 stocks (as per momentum ranking) out of Nifty 300 universe. I did the same, but instead
of Nifty 300 universe, I used Nifty 500 universe. Picked top 50 stocks (as per momentum ranking) from the Nifty 500 universe and invested 2% of capital in each. Will do rebalancing every quarter-end (June, Sep, Dec & March).
Also, as you would have noticed, unlike Nifty Alpha 50 index, which attaches differential weights to the underlying stocks (in the ratio of their "Alpha" score), mine is an equal-weighted (2% flat) version.
Let's see how this index performs. If I can beat Nifty Alpha 50, that
Let's see how this index performs. If I can beat Nifty Alpha 50, that
itself would be a great achievement for meπ€π€.
Needless to add, the trend-following Nifty FUT system continues to be live (currently short from 17773 FUT level). During major corrections when my "long-only stock" portfolio is down, this goes short and helps smoothen my equity curve.
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