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Benefit of Future Hedging

Open a FREE Share Trading Account with ZERO Brokerage - Buy and Sell Stocks without Brokerage - Set on System and Forget

Traditional brokers charge a lot on brokerage, however this broker does not charge anything for stock buying and selling. Also, you can set a Good Till Cancelled order after buying stock so that the system can sell the stock automatically at your desired price even if you are not monitoring the market. Plus only 25k is blocked for option selling. It takes 5 minutes to open an account online. Click here and Open Free Account with Them Today >>

There are times when you read a bad news about a stock but are not fully confident of buying its put options as this is an uncertain market you never know what may happen in a few days. In cases such as these what may a trader do?

One idea is short futures with stop loss – but we know how risky it is so its not recommended. Main problem is with gap up and down opening the next day against your trade. In one trade more than 25000 can be lost. Take the recent upside of SBI – it opened gap up on 25-Oct-2017. See this image:

SBI Gap UP Opening on 25-Oct-2017

SBI Gap UP Opening on 25-Oct-2017

Imagine if someone was short in SBI on 24-Oct-2017. He will repent his losses for hid entire life. This is the reason I keep telling LEARN HEDGING.

Those who hedge are free from such stress of gap up or gap down opening. Hedge has the ability to protect huge losses by a huge percentage depending on the quality of the hedge. In my course the the directional strategy is made in such a way that even if you are wrong in direction of the future you can make money. Yes you read it right – even if wrong you and making money.

Trader was WRONG in direction of future yet his trade was profitable

Of course as mentioned you can buy a PUT to keep the loss limited. But due to time loss the premiums can get evaporated in air pretty fast – premiums getting reduced with time means your money also going up in the air. Sad but true. This is major problem with Option Buyers.

Another way is to Short a Call. But then shorting a call also has unlimited risk on the upside.

If you feel a stock may go up you can always buy in cash, but you cannot short in cash. Only way is to trade derivatives to take benefit of a stock falling.

There are a lot of ways to hedge a future or option but hedging also has to be smartly done else hedge will be of not much use.

You can do my course and learn hedging, learn the strategies and trade in a better way rather speculate and lose huge.




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Traditional brokers charge a lot on brokerage, however this broker does not charge anything for stock buying and selling. Also, you can set a Good Till Cancelled order after buying stock so that the system can sell the stock automatically at your desired price even if you are not monitoring the market. Plus only 25k is blocked for option selling. It takes 5 minutes to open an account online. Click here and Open Free Account with Them Today >>

When Trend Is Up Its Better to Short Puts than Buy Calls
What Hedge Can Do It Reduces Losses To A Large Extend

About the author: I started trading stock markets since 2007. However my first 3 years were losses. Then I dedicated almost 1 year on studying, researching, paper trading options and learned a lot in that time. Since 2011 I am trading Nifty options profitably. Call me if you need any help trading options on 9051143004.

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