How does a person go about HEDGING the value of his portfolio?

[sunandaC]

Beta for Reliance :1.5 times.

Number of shares purchased : 1000 @ Rs. 325
per share.

Value of portfolio : Rs. 325,000.

To Create a hedge:


Y would look to sell futures worth,



325,000 * 1.5 = 487,500.


Value of Nifty Futures : 1300


To Cover Position : 375 Nifty Futures

( 487,500/1300)

 

[rosemarry2]

Beta for Reliance :1.5 times.

Number of shares purchased : 1000 @ Rs. 325
per share.

Value of portfolio : Rs. 325,000.

To Create a hedge:


Y would look to sell futures worth,



325,000 * 1.5 = 487,500.


Value of Nifty Futures : 1300


To Cover Position : 375 Nifty Futures

( 487,500/1300)

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