Placing all cash in a single inventory is unhealthy thought, by spreading the cash throughout many shares most of retail traders can’t play hedging in choices as one lot of possibility wants like 8lakh value of inventory(eg taken: hdfcbank).
Decreasing lot dimension to 50k-1lakh value of inventory will improve retail participation in possibility hedging and different methods that includes idividuals to carry inventory/cash to purchase inventory.
so did NSE ever thought-about to scale back lot dimension of inventory possibility earlier than?
It is extremely unlikely.Infact it was SEBI that elevated contract dimension to discourage small traders within the first place.
see one such article Sebi raises minimal contract dimension -(indiatimes.com)
Anyway, if you wish to get round this, there’s an approximate means through which you calculate the Beta of your portfolio towards say a benchmark like N50.Then use Nifty Choices to hedge.
Let say your portf beta is 1 bcos u maintain principally giant capsthen, contract worth of NF at 18K is 9L.
so for each 9L value you correspond 1 LOT. If BETA is 2, then each 9L is roughly 2 tons.
The technique you utilize once more depends upon the Delta of the by-product you employ to hedge, however in expiry/Excercise phrases you possibly can choose a PE strike of Choices beneath which you might be lined.You may even do it with Futures, however bottom-line is you should know what and the right way to use.
Joe_Maxpayne:
Decreasing lot dimension to 50k-1lakh value of inventory will improve retail participation in possibility hedging and different methods that includes idividuals to carry inventory/cash to purchase inventory.
It’s going to solely result in extra hypothesis which can damage small merchants greater than the large ones