1). You get 5x margin.
2). You get 3 months long expiries.
3). You are betting on the country’s biggest public corporations so it’s almost like betting on the Indian economy.
If you look at the past decade, the index doubled (5x margin=10 times) despite the corona-damaged levels, that’s like just around 26% compounded return over a decade. And if you look at the past 2 decades, it rose 7 times, which would become 35 times due to the margin. That’s like just under 20% compounded return over 2 decades. Are these returns low? What am I missing here?
Numbers are lucrative at current lot size one gains handsome Rs. 75 for each point move in Nifty but also loses 75 for Nifty losing each point keep that in mind.
When markets are falling, with less leveraged product like NiftyBees we can even average our position without any stress on our mind and heart. But does anyone have guts to stomach drawdowns of 50% in 2008 and 40% in 2020 by averaging leveraged product like Futures with increasing lots with each big fall in market? With historical numbers and statistics to support you can do averaging on Futures on paper as well but can anyone sit through such period in live markets without going crazy seeing huge fluctuations in P/L?
With historical data to back one can think of doing anything but doing that in live markets is really hard with you not knowing the outcome of what’s next.
Yeah, it’s definitely difficult to predict during live markets. I guess I got a bit greedy seeing the volatility during these times lol. Thanks for the quick reply.