Fortunous Equities

Fortuneous Equities strategy is a semi discretionary and quantitative strategy that is recommended on highly liquid equity derivatives.

The objective of the strategy is to long-term capital appreciation from a concentrated but diversified and hedged derivatives portfolio of equity and equity-related Securities.

However, there can be no assurance that the investment objective of the strategy or product will be achieved.

• Quant based strategies are complex models used to identify opportunities
• These models consist of strategies based on Quantitative parameters which rely on fundamental, technical and derivatives data.
• Technical, and Derivatives data and Statistical models are developed by leveraging data on parameters that impact price movements of underlying instruments.
• Price, Volume, and Open Interest are the major data inputs for Quant models.
• Hedge Funds and other big financial institutions use these strategies to generate additional returns.

• Reduces Human emotions, biases, and minimises errors during trading decisions.
• A disciplined selection and execution process offers better risk control.
• Consistency in strategy
• Uncorrelated returns with other asset classes and sub-asset classes
• Additional investment option for market participants

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

• High and multiple times capital appreciation over the long term.
• Suggest trades primarily in India’s most traded, and high liquid equity derivatives based on technical and derivatives analysis.
• Subscribers who are looking for uncorrelated returns to the market dynamics.
• Participants like to focus on the process instead of outcomes and like to deal with uncertainties of life and businesses.

• Fortuneous Equities suggests trades only in India’s largest companies and their derivatives.
• These stocks derivatives are the largest traded and highly liquid and are low volatile when compared to midcaps and small caps.
• These are India’s top companies with proven business models, a strong track record for decades and institutional holdings are also high.
• Trades are always suggested with hedge or insurance, hence the risk is minimised.
• The product or strategy will actively look for opportunities to achieve the objective of long term capital appreciation by investing or trading via long and short positions through Indian listed equity derivatives.
• The strategy or product will establish long positions in equity derivatives or sectors or indices with high expectations of appreciation potential and short positions in equity derivatives or sectors or indices which are deemed to be unattractive and underperform.
• We tend to buy stocks that are in a long term uptrend and avoid stocks in the downtrend.
• Aims to capture profit potential move of the underlying by entry mechanism, while seeking to limit downside or losses through active risk management using derivatives.
• The strategy is developed to minimise losses in losing trades and maximise profits in winning trades.
• As the strategy is implemented on derivatives, hence it is a highly volatile and good risk-reward strategy.
• This strategy is aimed to capture all three phases of trends (Bullish, Bearish and Neutral of the underlying)
• Monthly product and will be evaluated quarterly.
• However, the strategy can help meet the long term goal of capital appreciation.
• The ideal ticket size of Rs 32,50,000/- cash margin or a combination of Rs 20, 00,000/- Collateral (Approved Stocks or Approved Mutual Funds or a combination) and Rs 12,50,000/- cash margin.
• Equity shares or equity mutual funds Collateral accepted is calculated at 60% of market value of the portfolio
• Max collateral of equity mutual funds or shares is 50 lakhs
• Balanced funds or debt funds collateral accepted is calculated at 80% of market value of the portfolio
• Clearing Corporation and Exchanges Approved collateral may be used.
• For Better performance subscribe for a minimum of 2years.
• Very actively suggested strategy.
• Risk management inbuilt in the strategy process.
• Focuses on high conviction trade setups and underlying fundamental news flow which helps the trade direction to move in our favour or view while seeking to mitigate concentration risks through diversification across highly liquid underlying that arise from trading or investing into a single underlying.
• The amount is always at high risk but we always try to manage and reduce risk  and aim at the generation of profits
• Finally, through active research, we try to deliver an enhanced risk/return profile for the product or strategy.

• An almost equal number of winning and losing trades with average winning trades to the tune of Rs 5,000 to Rs 75,000 per trade, while average losing trades to the tune of Rs 20,000 to Rs 40,000 per trade.
• The losing streak may be up to 20 consecutive trades.
• Slow and steady high capital appreciation over the long term

• Quick Profits from the strategy
• Overnight get rich
• High Series of winning trades

• Equity as an asset class has the best potential to beat inflation in the long run and generate long term wealth.
• Derivatives as an asset class have the triple advantage of asymmetric returns, hedging or reducing underlying risks and generating cash flows.
• The strategy suggests trades in one of the highly liquid derivatives instruments of the world.
• Fortuneous Equities suggests trades only in India’s largest companies and their derivatives.
• These stocks derivatives are the largest traded and highly liquid and are low volatile when compared to midcaps and small caps.
• These are India’s top companies with proven business models, a strong track record for decades and institutional holdings are also high.

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

• Also, assess your financial status so that you have sufficient resources and emotional tolerance to bear any losses which may result from this strategy or product.
• Consult your financial planner if in doubt about whether the strategy or product is suitable for them else, please
• Check our risk profile questionnaire to find out suitable product and strategy for you.

Capital Risk

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

Derivatives and Leverage

The product or strategy uses derivatives which shall result in increased leverage and may lead to significant losses.

Quality Risk

Risk of investing in probable unsustainable/weak companies. There may be a case where the good/strong company may become weak/unsustainable, may slip from India’s most favoured company tag and become illiquid in the derivatives segment and subsequently may be removed from the derivatives segment

Price and Liquidity Risk

The product or strategy may suggest trades and investments in high volatile phases of markets and may also hold positions and which may become illiquid. Risk of overpaying for a company. Proper timely exit or cost of efficient sale can be impaired due to reduced trading volumes or increased price volatility.

Market Risk

The product or strategy is subject to regular market fluctuations or volatility and the risks are associated with trading or investing in financial markets. Therefore the value of asset or investment and income from the asset or investment shall rise or fall and you may not even get back the originally invested amount or in the case of derivatives may even lose more than the originally invested amount.

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, but a positive outcome is not guaranteed over any period and the entire capital is at risk.

Long Short Strategy Risk

The underlying or strategy could face higher losses if it’s long and short exposures move unfavourably and both in opposite directions at the same time.

Short Selling Risk

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

The additional risks of using derivative strategies can be:

• Illiquidity and mispricing of the Futures/Options
• Lack of opportunity
• The inability of derivatives 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 derivatives above the hedging requirements can lead to losses
• Exposure to derivatives can also limit the profits from a genuine investment transaction
• The prices which are seen on the screen need not be the same at which execution will take place
• In the case of option writing, the downside of the strategy could be more than the option premium earned.