Derivative Strategies

Buy 100 units of Nifty Bees @ 505, Buy 1 lot Feb 4800 put @ 60, Buy 1 lot Feb 4700 put @ 44 and sell 6 lots 4600 puts at 30

The strategy will always remain profitable above 4600 levels with the increasing returns of 1% to 4.5% ranging from 4900 to 5500 levels of Nifty on upside. On the falling side returns would increase a bit from 0.5% to 6.5% ranging from 4800 to 4600 levels of Nifty. The only risk is that it would be extremely risky below 4535 levels. But, as Nifty is almost 10% away from such levels it makes a lot of sense to get into this strategy.

Sell 4 lots of 5400 Call @ 25, Buy 1 lot 5000 Call @ 160 and Sell 4 lots 4600 puts @ 30.

The strategy will be profitable in the range of 4600 to 5550 levels of Nifty with increasing profit going upwards. The minimum profit would be of 1.41% which would start increasing after 5000 levels and the maximum profit would be of 10% at 5500 levels. The risk would be of breaking the 4600-5550 range which would turn around into huge losses. But as both the levels are almost 10% away, one may initiate this position.

Investing in Global Markets

Global inflation is the main concern which everyone aims to beat while doing investments. What about an idea of capturing growth in global inflation?

Though it may sound strange but it is possible these days by investing into schemes whose main focus is to capture the growth of assets which get benefited by rising inflation. Such assets may not be accessible to all investors, but it is possible to invest in them through investing in stocks of such companies which get true benefits of rising inflation. Many companies which truly reflect the asset movements in their stock prices are traded in global markets.

The Fidelity Global Real Assets Fund is a convenient and affordable way to buy into real assets. It also helps complement the financial assets in your portfolio and optimize returns.

Real assets tend to outperform when inflation rises. Given the huge stimulus programmes by central governments around the world, 2010 and 2011 are likely to be characterized by increasing GDP growth trends and higher inflation levels.

Real assets are undoubtedly a part of the long-term emerging markets investment case. For example the evolution of the tube system in Beijing will go on over the next forty years before it is comparable with the undergrounds in Paris and Tokyo in terms of density and coverage. It is clear that there is room for investment in this area for many years to come.