Let me parse these transactions and calculate the net position.

Transaction Breakdown

SBI Nifty 50 Equal Weight ETF (SBINEQWETF)

SBINEQWETF total: 28,850 shares

Nifty Next 50 ETF (NEXT50IETF)

NEXT50IETF total: 12,270 shares

SBI Nifty Next 50 ETF (SETFNN50)

SETFNN50 total: 3 shares

Nifty 27DEC 27000 PE (Put Option)

Net Position Summary

Hedge Analysis

The put option covers a notional of ~₹4.39 crore, while your long equity position is only ~₹19.5 lakh.

The hedge notional is ~22.5x larger than your long position — you are significantly over-hedged. The put premium of ~₹1.05 lakh also represents about 5.4% of your equity notional, which is a meaningful cost relative to the position size.

You're right — sorry about that. Let me correct:

The 65 in the trade data is the number of shares (not lots). Nifty options have a lot size of 25, so 65 shares = the executed quantity directly.

Corrected Hedge Analysis

Hedge vs Notional Comparison

The hedge is slightly less than the notional — covering about 90% of your long equity position. A ~₹1.97 lakh portion remains unhedged.

To assess whether the hedge is good in terms of correlation, I need to compare what you're long versus what you're hedging with.

• Your long positions: SBI Nifty 50 Equal Weight ETF + Nifty Next 50 ETFs (NEXT50IETF and SETFNN50)
• Your hedge: Nifty 27DEC 27000 PE (put on the standard Nifty 50 index)

The problem is a correlation mismatch:

• The Nifty 50 Equal Weight ETF tracks a different index than the standard Nifty 50 — equal weight means smaller stocks have the same weight as large caps, so its behaviour diverges meaningfully from the market-cap-weighted Nifty 50.
• The Nifty Next 50 ETF tracks the next 50 stocks outside the Nifty 50 — entirely different constituents from the Nifty 50 index your put is based on.
• Your put hedge is on the standard Nifty 50.

So if the Nifty 50 falls, the put pays off — but your Next 50 and Equal Weight holdings may not fall in lockstep. They could fall more, less, or even move differently. The hedge isn't providing a direct offset for those specific exposures.

It's not a clean hedge — there's significant basis risk here. A more correlated hedge would be puts on the Nifty Next 50 index or the specific ETFs themselves, if available.

I don't have Nifty index data in the local database — those are Indian indices. Let me search for publicly available data on their correlation.## Nifty 50 vs Nifty Next 50 — Correlation

The correlation between the Nifty 50 and Nifty Next 50 is approximately ~0.82 (per NSE's own index analytics). NSE has also cited it as 71% with a beta of 0.95 in FY2024 filings — the exact number depends on the measurement period, but both sources confirm the correlation is high but not perfect.

What this means for your hedge

The practical problem

In a downturn where your Nifty 50 put pays off:

• If Nifty 50 falls 5%, Next 50 typically falls 6–7%
• Your put hedges the Nifty 50 leg, but the Next 50 losses outpace it
• The hedge covers ~90% of the notional, but it doesn't match the composition — so in a sell-off, you could still see net P&L pain because Next 50 and Equal Weight behave differently than the index you're hedged against

The correlation is high enough that the hedge isn't useless, but the basis risk is real — especially in sharp corrections where Next 50 tends to disproportionately underperform.