Nifty Rider | Ride high on Upside gains and Dodge downside wipeouts

Go long and short on NIFTY Futures while holding on to your long-term investments.

Nifty Rider | Ride high on Upside gains and Dodge downside wipeouts

Go long and short on NIFTY Futures while holding on to your long-term investments.

How to trade is explained towards the end of the post.
Watch this webinar for a complete explainer on Nifty Rider

What is NIFTY Rider all about?

Nifty Rider is a hybrid approach to trading and investing, designed for people with greater than 9 lakhs of existing investments in the market.

This model has two parts: a trading part and an investing part.

The trading part uses NIFTY futures, and the Investing part can comprise anything you hold for the long term, stocks, ETFs, and mutual funds.

The trading part goes both long and short on the market, and the investing part stays invested (long) always.

Confusing? Here’s an example.

Investing component

Let's say you started with this model on the 3rd of Jan 2022 till the 7th of April 2022

You already have 8 lakhs in a NIFTY Mutual fund for the investing component. That's a prerequisite.

The number of units of NIFTY MF that you hold = 8,00,000/190 (Per Unit Buy Price) = 4211 Units

Date NAV Units Position Value
3rd Jan 2022 190 4211 800000
7th Apr 2022 191 4211 804211

In three months, you have a profit of 4211/800000 = 0.52%

This is the investing component. Let's move to the more interesting part, the Trading component of the model.

Trading component

You need to keep Rs. 1L to buy and sell 1 lot of NIFTY Futures.

Before we move further - a small intro to NIFTY Futures - Siip it if you how Futures work

In futures trading, there are four key concepts.

  1. Lot size - This is the minimum quantity of contracts you can buy or sell. It's decided by the exchange. Currently, the lot size for NIFTY Futures is 50.
  2. Margin - This is the money you need with your broker to take a long or short position in the futures contract. Think of this as similar to a down payment you make when buying a house. The current margin required for one lot of nifty futures would be close to 1.1 L. You can use this calculator to check -
  3. Contract Value - This is the value of the position that you are taking. It's calculated by multiplying lot size with the current price of the underlying index, say for example, if NIFTY is at 18000, the current value of nifty futures will be 18000*50 = 9L. By blocking 1.1L, you are taking a position worth 9L. Think of Contract value as the house's market value you want to buy.
  4. MTM (Mark to market) - In Futures trading, when you have gains, that cash gets deposited into your brokerage account at the end of the day. Likewise, when there are losses, your cash from your brokerage account is deducted from your brokerage account. That’s why you must keep some buffer cash in your brokerage account.

Wohoo! Now you are all set to understand the magic of the Trading component in the NIFTY Rider model.

Back to Trading component

Here you need to go long or short (buy or sell) 1 lot of nifty futures based on the signals from the model. This is a positional model, meaning typically, we hold the trades for as long as the signal indicates.

Here are the futures trades you would have taken if you had started from 3rd of Jan till the 7th of April. 2022

Entry Date Entry Price Exit Date Exit Price Direction Period (Days) Trade P&L Cumulative P&L
03-Jan 17503 18-Jan 18153 Long 15 651 651
18-Jan 18094 31-Jan 17341 Short 12 753 1404
31-Jan 17282 31-Jan 17344 Short 0 -62 1342
31-Jan 17394 31-Jan 17352 Long 0 -42 1300
01-Feb 17585 01-Feb 17376 Long 0 -209 1091
01-Feb 17294 01-Feb 17544 Short 0 -250 841
02-Feb 17744 04-Feb 17543 Long 1 -200 641
04-Feb 17484 04-Feb 17549 Short 0 -65 576
07-Feb 17396 09-Feb 17372 Short 1 24 600
09-Feb 17443 11-Feb 17427 Long 1 -16 584
11-Feb 17318 15-Feb 17283 Short 4 35 619
15-Feb 17354 17-Feb 17282 Long 1 -72 547
18-Feb 17317 18-Feb 17291 Long 0 -26 521
21-Feb 17311 21-Feb 17302 Long 0 -9 512
23-Feb 17134 23-Feb 17195 Short 0 -61 450
23-Feb 17124 03-Mar 16746 Short 7 378 828
03-Mar 16612 09-Mar 16206 Short 6 407 1235
09-Mar 16321 24-Mar 17118 Long 14 797 2031
24-Mar 17264 25-Mar 17130 Long 1 -133 1898
28-Mar 17042 28-Mar 17141 Short 0 -100 1798
28-Mar 17216 07-Apr 17733 Long 9 516 2314

By trading one lot of NIFTY Futures for nearly three months, you would have made a profit of 2300 points.

2300 points = 50 * 2300 = Rs. 1,15,000

Calculating your three months return in Nifty Rider

Investing component + Trading component

  1. You made Rs. 4200 on an investment of 8L in the NIFTY Index
  2. You made Rs. 1,15,000 on investment of 1.1L through NIFTY futures

Note these returns do not include costs and taxes.

Why does this hybrid investing model work? What’s the logic behind it?

There are three primary reasons this approach to investing works.

  1. NIFTY50 is a trending index - The model works because the NIFTY50 index is a trending index on certain time frames. That means if the index starts going up, it continues to go up for a few days or weeks. Likewise, when it starts going down, it continues in that direction. The model tries to capture such moves.
  2. Leverage is capped - Futures trading is known to be risky as there is leverage. Leverage, in simple words means taking a position that's worth much more than what you are paying for. Both profits and losses get magnified. In the current hybrid model, we cap this leverage by including the ‘Investing’ component.
  3. Comes with a Stop Loss on the trading component - In this hybrid model, the trading component offers both risk and return; hence, having a stop loss helps curb both losses and capture accumulated gains.

Trend-following is a highly validated concept in the world of investing. This model applies the concept specifically to the NIFTY50 index with an element of limited leverage.

Is this model for me?

You should invest in this model if

  1. You have existing investments in the stock market to the tune of 8L or more; you would like to protect your investments from market crashes while adding to your gains in an up trending market.
  2. You want to make fresh investments in the market for upwards of 8L and get the benefits of protection from crashes.
  3. You are an options trader and want to use the model signals as a bias for taking your options trades.
  4. You want to have a long or short bias of the index generally.

When markets crash, to what extent does this model protect my investments?

Data tells us that the model captures, on average, 45% of it whenever a market crash extends beyond a couple of days.

For example, let's say the markets are at 18000 now, and it starts crashing, the short on the system may come in at 17900, and the market may make a low of 17200 before bouncing back. That was an 800-point crash. Of which the system may - on average, capture 360 points.

However, due to some personal reasons, if you want to exit at any point during the crash, the model should cover your losses greater than 45%.

For example, if you had to exit all your market investments at 17300, you could book the futures short with 600 points gains and your investing component as well.

Returns of the model over the years

How to trade the NIFTY Rider model?

Follow these 4 steps, and you are all set!

  1. Make sure you have existing market investments worth approximately 9L (min). This can be stocks, ETFs, or even Mutual funds.
  2. Have the F&O segment enabled with your broker account.
  3. Check the signal status on the app, if Long, you need to buy 1 lot of NIFTY Futures’ current month's expiry. NRML/Positional. (1 Lot each for 9L of investments)
  4. Place a Stop Loss order based on the price provided. Use SL-L order. Update it every day at 9:15.

Placing the stop loss order

  1. Check the stop loss level provided on the model page of the investmint app
  2. Place an SL-L order with your broker.
Example - For a long trade, if the Stop loss price is 18550, you would need to use 18550 as the Trigger Price and 18555 as the Limit price for the SL-L order. Likewise, for a short trade, if the Stop loss price is 18550 you would need to 18550 as Trigger price and 18545 as limit price. This will ensure that the order goes through with a maximum 5 point slippage.
Note - SL-L orders come with a risk of not getting executed, in which case you can use SL-M order if you would prefer guaranteed execution.

Must read - before you start!

Your market investments in Stocks, ETFs, or Mutual Funds are key. The model works as stated only in combination with the ‘investing part’. Do not trade only the ‘Trading part’ in isolation.

Maintain adequate buffer cash in the broker account for MTM losses.

The returns stated on the app include the returns on both the investing and the trading legs.

You need to place a stop loss daily once you are in the trade.

For any questions or clarifications, please reach out to us at or, or better still, drop into our vibrant telegram channel with close to 4000 active minters.

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