Sampadha’s Affluent Mine

Affluent Mine is a semi discretionary and quantitative strategy that is recommended on India + Financiers + Yellow Gold + Black Gold(Nifty + Bank Nifty + Fin Nifty + Gold Mini + Crude Oil).

Product Objectives

The objective of the strategy is rapid capital appreciation through trades in India + Financiers + Yellow Gold + Black Gold(Nifty + Bank Nifty + Fin Nifty + Gold Mini + Crude Oil).

However, there is no assurance that the strategy’s or product’s investment objective will be met.

What is Quantitative Strategy?
  • Quant based strategies are sophisticated models that are used to identify opportunities. These models are made up of quantitative strategies that rely on Fundamental, Technical, and Derivatives data.
  • Technical and derivatives data, as well as statistical models, are created by leveraging data on parameters that influence the price movements of underlying instruments.
  • Quant models rely heavily on price, volume, and open interest data.
  • These strategies are used by hedge funds and other large financial institutions to generate additional returns.
Benefits of Quant Models
  • Reduces human emotions, biases, and errors when making trading decisions.
  • A more disciplined selection and execution process allow for better risk management.
  • Consistency in strategy, i.e. in the screening and implementation of opportunities.
  • Returns are uncorrelated with other asset classes and sub-asset classes.
  • Additional investment option for market participants.
Product / Strategy suitability

The strategy is suitable for traders/investors/participants who are seeking

  • Long-term capital appreciation and regular income.
  • Trades primarily in India’s most traded, and highly liquid equity derivatives based on technical and derivatives analysis.
  • Additional returns on idle assets.
  • Uncorrelated returns to the other asset and sub-asset classes.
  • Process over outcomes and like to deal with uncertainties of life and business.
About the strategy
  • Only index derivatives will be suggested. Derivatives as an asset class have the triple advantage of asymmetric returns, hedging or reducing underlying risks, and generating cash flows.
  • The strategy is developed to minimize losses in losing trades and maximize profits in winning trades.
  • As the strategy is implemented on derivatives, it is a highly volatile and high-risk – high-reward strategy. The amount invested is always at high risk but we always try to manage and minimize risk.
  • Very actively suggested strategy with a high level of conviction.
  • Risk management is inbuilt in the strategy process
Product Requirements
  • Affluent Mine is a monthly product and the strategy will be evaluated quarterly. However, the product can help meet the long-term goal of capital appreciation.
  • The product requires an ideal ticket size of Rs.50 Lakhs cash margin or a combination of Rs.60 Lakhs Collateral (Approved Bank Fixed Deposits or Bank Guarantees or Approved Stocks or Approved Mutual Funds or combination) and Rs.20 Lakhs cash margin.
  • Accepted collateral for equity shares, mutual funds is 60% of the portfolio’s market value. The maximum collateral amount for equity shares, mutual funds is Rs.42 lakhs.
  • The margin from collateral accepted for Balanced funds or Debt funds is calculated at 80% of the portfolio’s market value.
  • Clearing Corporations and Exchanges approved margin from collateral may be used.
  • For better performance or results, subscribe to the product for a minimum period of 2 years.
What to expect!
  • Less frequent huge winning trades ranging from Rs.10,000 to Rs.40,000 per trade.
  • Very frequent or series of losing trades ranging from Rs.15,000 to Rs.25,000 per trade.
  • Slow and steady high capital appreciation over the long term.
What not to expect!
  • Quick profits from the strategy.
  • Getting rich overnight.
  • High series of winning trades.
Product considerations

Subscribers/ Clients/ Investors of the products should consider the risks involved with investing and trading, and decide (or consult your financial planner) whether the strategy suits your risk profile, investment requirements, and financial goals.

  • Also, assess your financial status to ensure that you have sufficient resources and emotional tolerance to bear any losses that may result from this strategy or product.
  • Consult your financial planner if you are unsure whether the strategy or product is right for you. Otherwise, please fill out our risk profile questionnaire to find suitable products and strategies for you.
  • Check our risk profile questionnaire to find out suitable products and strategies for you.
Strategy Risks

Capital Risk:

Investments or trades are subject to market, economic, regulatory, market sentiment, and political risks. In view of these risks, the strategy may experience high volatility from time to time. The value of the investment may become worth more or less than at the time of the original investment. The investors or traders should consider these risks that may impact their capital, before investing.

Derivatives and Leverage:

The product or strategy employs derivatives, which increases leverage and may result in significant losses.

Price and Liquidity Risk:

  • The product or strategy may suggest trades and investments during high-volatility market phases, as well as hold positions that may become illiquid.
  • The risk of overpaying for a company can occur as a result of abnormal market behavior.
  • Reduced trading volumes or increased price volatility can jeopardize proper timely exit or cost of efficient sale.

Market Risk:

The product or strategy is subject to regular market fluctuations (or volatility), and the risks of trading or investing in financial markets apply. As a result, the value of asset or investment and income from the asset or investment, may rise or fall, and you may not receive the amount originally invested. In the case of derivatives, you could lose more than you initially invested.

Management Risk:

The investment/trading analysis techniques and risk analysis done by Sampadha will not produce the desired risks or returns, and that certain policies or developments may affect the investment/trading techniques in connection with managing the product/strategy.

Total Returns Risk:

While our product or strategy aims to provide capital appreciation, a positive outcome is not guaranteed over any period and the entire capital is at risk.

Long Short Strategy Risk:

If the underlyings or strategy’s long and short exposures move unfavorably or in opposite directions at the same time, the strategy may suffer higher losses.

Short Selling Risk:

A short sale exposes the strategy or product to the risk of an increase in the price of the underlying (or derivatives); this could result in a theoretically unlimited loss.

The following are some of the additional risks associated with using derivatives strategies:

  • Illiquidity and mispricing of the Futures/Options.
  • Lack of opportunities.
  • Derivatives’ inability to perfectly correlate with the underlying (Stocks, Indices, Assets).
  • The cost of a hedge can be higher than the adverse impact of market movements during high volatile periods.
  • Exposure to hedging over and above the hedging requirements can lead to losses.
  • Exposure to derivatives strategies can also limit profits from a genuine investment transaction.
  • The prices displayed on the screen do not have to be the same as the prices at which the execution will take place.
  • In the case of option writing, the strategy’s downside could be greater than the option premium earned.

Click here to know more about different risks and managing them

Risk management
  • This strategy is aimed to capture all three phases of trends (Bullish, Bearish and Neutral of the underlyings).
  • The strategy focuses on high conviction trade setups and underlying fundamental news flow which helps the trade direction to move in favor of our view.

  • This product actively looks for trading opportunities frequently and is a highly suggested strategy for high risk – high reward seeking market participants.

  • Risk management is inbuilt in the strategy process. The strategy is developed to minimize losses in losing trades and maximize profits in winning trades. It aims to capture profit potential move of the underlyings by entry mechanism, while seeking to limit downside or losses through active risk management using derivatives.

  •  Investments in securities market are subject to market risk.

  • Returns are calculated on Cash invested only.

  • Collateral value is not considered for returns calculation.

  • Past Results are not indicative of future Results.

  • Derivatives and strategies involve significant risk.

  • Loss beyond original investment may be possible.

  • Registration granted by SEBI and certification from NISM in no way guarantee performance or provide any assurance of returns.

  • As the strategy is implemented on derivatives, it is a high-risk high-reward strategy. The amount invested is always at high risk. However, we do our best to mitigate the risk. Through active research, we strive to deliver an enhanced risk-return profile for the product or strategy. Trades are always suggested with hedge or insurance, hence the risk is minimized.