Basic Plan

The main ideas from this information are: the basic plan involves investing in Nifty Bees, using them as margin for futures trading, purchasing put options, and allocating the remaining capital to other investments. The goal is to generate a return of 7.15% or higher. There are costs involved, such as hedging and forwarding costs, but there are also interest earnings from debt investments. Managing annual costs in the basic plan involves a structured approach and efficient use of earned interest. Basic plan is illustrated with a Rs 1 crore exposure example. Investment Allocation. Invest 30 lakhs in Nifty Bees. Pledge Nifty Bees to obtain margin in the Futures & Options, F&O, segment. Synthetic Futures Position. Utilize the margin to purchase synthetic futures of Nifty 50 for an exposure of 70 lakhs. Put Options Purchase. Share Put Options in a quantity equivalent to the combined position of Nifty Bees and Nifty Futures. Flexibility in Asset Allocation. The remaining 70% of the capital can be invested in alternative asset classes, business ventures, or used for loan repayments. The objective is to generate a return of 7.15% or higher from this investment. Costs in the Relaxed Plan. Hedging Cost. Equivalent 5% of the total exposure value. Example 5 lakhs in the provided scenario. Futures Forwarding Cost. Calculation 5% of the futures exposure, equivalent to 3.5% of the total exposure. Example 3.5 lakhs in the given case. Gross Cost. The sum of hedging cost and forwarding cost. Example, Gross Cost equals 8.5% of the total exposure value or 8.5 lakhs. Interest Earnings from Debt Investment. Interest Rate, 7.15% on the debt investment amounting to 5% of the total exposure. Net Cost. Calculation, Net Cost equals hedging cost plus forwarding cost minus interest earnings. Example, Net Cost equals 3.5 lakhs. Managing Annual Costs in Basic Plan. Managing annual costs in the basic plan of index long-term strategy involves a structured approach to handle expenses and utilize earned interest efficiently. Here's a step-by-step guide. Initial Allocation. Invest 30% of the total exposure value in the index long-term strategy. Allocate the remaining 70% to other asset classes. Interest Earnings.