Your actively managed derivative portfolio

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01. Features

Short-term derivatives backed by sophisticated hedging strategies.

Quant-based strategies

Investments in Arbor are made taking into account market data and other quantitative aspects.

Market Neutral

Markets can move up or down but our strategies are designed for profitability, irrespective of direction.

Income Generating

Generate periodic income thanks to the short-term and adaptive nature of the strategies.

02. How it works

Sophisticated investors do this all the time. Now it's your turn

You don't always have to invest cash for derivative trading, in fact, most HNIs don't. Minance will first collateralize your mutual funds with the stock exchange. For every asset that you put up, you receive margin after a 'haircut'. For example, if you collateralize funds worth ₹10 lakhs, the exchange might give you a margin of ₹8 lakhs for derivative trading, the difference of two lakhs is kept by the exchange to protect itself from market downsides. This is referred to as a 'haircut'.

We use the margin gained from your mutual funds to execute very conservative derivative strategies. These strategies consistently generate returns between 0.8%* to 1.2%* every month.

Regular Income

Earn a monthly income, choose to redeem it for your expenses or reinvest it to benefit from compounding.

Low risk

APC aims to mitigate risk first and then generate returns.

No additional investment

You leverage your existing equity or debt funds invested with Minance. No additional monies need to be invested.

03. Strategies

A strategy for every market

Our strategies are adaptive to most market conditions.

Vega Crush
Markets oscillate between high and low volatility phases, which are measured by Vega. Selling options for a higher premium in a high Vega environment helps you capture profits as markets stablise, irrespective of its direction.
Theta Decay
Also known as time decay, these option writing strategies benefit from falling option prices as we head towards the expiry of a contract.
Volatility Dispersion
A dispersion trade benefits from a substantial difference in the volatility of an index and one of it's major components. This is a type of correlation trading as such trades are usually profitable in a time when the individual stocks are not strongly correlated.
Calendar Spreads
These are options trades that are spread simultaneously between two different months; entering a long and short position on the same underlying asset but at different expiries. Calendar spreads carry lower margins.
Delta Neutral
Delta neutral strategies are options strategies that are designed to create positions that aren't likely to be affected by small movements in the price of a security. This is achieved by ensuring that the overall Delta value of a position is as close to zero as possible.
Equity Hedged Options
These option strategies are used to benefit from a falling market but the upside risk is hedged by going long on equities and short on options.
04. Things you need to know

Here are some more details

Derivative trading is sophisticated. Here's what you need to know.

What is the minimum investment and what are the instruments used?

The minimum investment is ₹5 lakhs and we invest majorly in index options, futures and equities.

Are equities held for a long time in Arbor?

No, equity trades in Arbor are designed to benefit from short-term trends in stocks. Some of the strategies used involve a mix of both equities and derivatives. In order to boost returns, equities held in your account are collateralized and the margin released by the broker is used for derivative trades.

Is derivative trading risky?

Futures and options have an inherent risk because of the leverage built into derivatives. However, derivatives also help you control your risk using different types of hedging techniques.

How are derivatives taxed?

Derivative income is considered as income from non-speculative business and taxed under the head 'Income from Business'. Generally derivatives are taxed as per your tax slab. Gains from short term equity trades are taxed at 15%. But there's more to it.

Read more about taxation

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