Introduction

Investing in Yes Bank can be a risky venture, but with the right strategies, you can navigate the volatile market and make informed decisions. This guide will explore the current market conditions, potential future scenarios, and practical steps to protect and grow your investment.

Understanding the Current Market

Yes Bank, facing fundamental and technical weaknesses, is not a recommended buy until 2023. As of now, the bank's loan book shows signs of increased stress, and profits are not sustainable. Promoters' shareholding is negligible, suggesting a lack of support from key stakeholders.

Historically, Yes Bank has struggled to maintain stability, with a dip expected in the near future. By the end of the year, the stock is likely to settle between 14.14 and 14.22, with occasional surges above 15 points but not a sustainable position.

Strategic Hedging

For those holding substantial shares, a strategic approach can mitigate losses and prepare for reinvestment. Hedging involves selling and buying shares within a short timeframe to lock in gains and protect your investment. Here’s a detailed guide:

Step-by-Step Hedging Strategy

Before You Begin

Ensure you have at least 60,000 to 70,000 INR in your account to execute the hedging strategy effectively. This amount will be used to buy back shares on the day of sale.

Execution

Monitor your Yes Bank shares closely. Once they reach 14.06, sell half of your shares immediately.

By the end of the day, use the proceeds to buy back the sold shares.

Repeat this process if the shares drop below 14.06 and stay there for the day. If they rise above 15.15, only sell half of the shares and consider buying them back when the price drops.

This method effectively hedges your investment, protecting you from significant losses while keeping the option to reinvest when the price falls.

When to Use This Strategy

This approach is ideal for shareholders with a substantial investment in Yes Bank. It is not recommended for those with smaller holdings or those uncomfortable with rapid share transactions.

When Not to Use This Strategy

If your shares are already trading below 13.50 or shows no signs of upward movement, it is advisable to wait for a better opportunity. Similarly, if you require the assistance of an advisor, follow a similar pattern but only buy back shares when the price falls and stays low for the day.

Conclusion and Future Investment

Protecting your investment in Yes Bank is crucial, especially given the bank's current financial challenges. By implementing a balanced approach, including hedging and strategic selling, you can safeguard your assets and prepare for potential reinvestments.

Remember, the key is to stay informed and adapt your strategies as the market evolves. For ongoing advice and real-time updates, follow discussions and experts in the sensible stocking space to keep your investment portfolio strong.