NIFTY performance for the month of July 2011

MNGF performance for the month of July 2011

5,350.00

5,400.00

5,450.00

5,500.00

5,550.00

5,600.00

5,650.00

5,700.00

5,750.00

1,050.00

1,060.00

1,070.00

1,080.00

1,090.00

1,100.00

1,110.00

1,120.00

Monthly returns comparison

1-Jun 1-Jul Cumulative % Return

NIFTY Index 0.99% -2.93% -1.94% MNGF Index 4.41% 2.44% 6.85%

MNGF Strategy for the month of July

When market showed resistance to the upward trend, even though there was no clear sign of downward trend, we decided to liquidate the equity positions. The reason for doing so was simple; our target for equity in the MNGF basket was nearly achieved.

We then build our strategy around shorting of options, all out of money options. Charts helped us manage risks in option shorting. Market remained highly volatile throughout the month, because of which options hesitated to shed premium. But as soon as market entered mid month, premium fell down sharply giving us good returns.

The expiry day was a bit unusual with gap down of some 50 points. This was opposite to our initial plan for expiry. The day was quite a bit learning and we came up with “MNGF Expiry- Circle theory”. We are quite positive on this theory that has the ability to boost our returns on upcoming expiry months