Trading

Assignment
Group4_Section A_DRM
27/06/2016

Futures

Lot
Purch
ased

Lo
t
Siz
e

TATAMOT
ORS

15
00

MOTHERS
UMI

15
00

ADANIPO
RTS

10

25
00

HEROMOT
OCO

20
0

10

75

Underlyin
g Asset

Stock
Futures

Total
stock
futures
Index
Futures
NIFTY
Total
Index Fut
Currency
Futures
USDINR
Total
Currency
Fut
Total Fut

Expir
y
Date

30Jun16
30Jun16
25Aug16
30Jun16

Posi
tion

Current
Buy
Price Mar
Pric
(27/06/ gin
e
2016)

Buy
Value

Unrealis
ed
Profit/L
oss

LON
G

448
.85

451

16. 539293
02%
.275

16125

LON
G

276
.7

274.8

15. 329134
86%
.65

-14250

LON
G

205
.9

206

12. 655276
73%
.75

2500

Shor
t

304
3.3

3036.1
5

12. 380412
50%
.5

7150

190411
7.175

30Jun16

LON
G

808
6.9

8121

150

15
0

27Jul-16

SHO
RT

Mar
ket
valu
e of
hold
ing

555
418.
275
314
884.
65
657
776.
75
373
262.
5

Positi
squ
on
ared
Enter
off
ed on

no

NO

NO

No

23Jun16
24Jun16
24Jun16
24Jun16

11525

13. 818798
50%
.625

25575

818798
.625

25575

68.
37

68.19

13%

199982
.25

4050

199982
.25

4050

292289
8.05

26850

24Jun16

NO

24Jun16

no

After the news of Brexit the market bottomed out on 24-June. However, considering the strong
fundamentals of Indian economy and India being a consumption driven economy having a miniscule
direct impact of turbulence in EU. Exports to EU contribute only 2% to Indias GDP. Thus we
speculated the recovery in Indian markets and bought the long positions in NIFTY anticipating the
recovery of the markets which went into the panic mode on Friday.
The equity stock futures we bought were on the basis of speculation, Tata Motors lost nearly 8% on
Friday. The market in the mode of panic went into selling spree. However, the impact of Brexit, if any
will be gradual on JLR sales and will atleast take 2 years. Given the robust domestic CV business and
JLR business resilient to the impact of Brexit it was bound o bounce back thus we took the long
position in Tata motors.
HeroMoto Corp position is based on the hedging of the stock bought, Thus we have shorted HERO
future. With the recovery of the 2wheeler market in India Hero is expected to be the biggest gainer.
Also going ahead with the rising urban income and expected healthy monsoon we anticipate Hero to
perform well in near future thus we bought the stocks for HeroMotocorp
Adani Port and Motherson Sumi was bought in the speculation of the stock being bottomed out and
will recover with the market given their strong fundamentals of the business and strong order book.

Equity

STOCK

Numb Date of
er of Purchas
Stocks
e

HEROMOTO
CO

150

FIEMIND

400

JAMNAAUT
O
TATAMTRDV
R

Total
Equity

1000
500

24-Jun16
24-Jun16
24-Jun16
24-Jun16

Current
Buy
Price
Pric
(27/06/201
e
6)
305
3027.85
2

Hold
Value
457800

Unrealis
Market
ed
Value Profit/Lo
ss
454177
-3622.5
.5

Realised
Profit/lo
ss
0

830

839.5

332000

335800

3800

169

171.35

169000

171350

2350

295.
5

299

147750

149500

1750

1110827
.5

4277.5

We have chosen auto and auto ancillary sector in the equity as it is a close proxy to the economy.
India being the growing and the promising economy, it will lead to the growth of the auto sector.
Auto sector be it 2Wheeler, PV or CV is poised to grow over the medium to long term. Thus we have
chosen a HeroMoto Corp a major 2Wheeler player having the largest market share. Fiem Industry
which is a leading manufacturer of head lights, body panels and LED lights, It is the largest
manufacturer of headlights for 2W having HMSI and Hero as its major client. Jamna Auto the largest
manufacturer of Leaf spring suspensions having about 67% market share is chosen to reap the
benefit of the upcycle in the CV segment. We chose Tata Motors looking at its robust CV segment
sales and growing JLR business.
Also we have the cash balance of close to 9.67 Lakh to meet with any contingencies caused due to
the market volatility.

CASH POSITION OUTSTANDING

TOTAL INITIAL CASH
TOTAL EQUITY VALUE
TOTAL DERIVATIVE VALUE
CASH POSITION OUTSTANDING

5000000
1110827.5
2922898.05
966274.45