≡ Menu

MCX Gold Options Trade With Hedge


MCX has introduced gold option contracts that start trading today. It is good news for option traders who are profitable trading options. Liquidity in Gold Futures trading is very good which will show in Gold Option trading too.

However you must hedge your trades – without hedging you are at 100% or more risk.

What is a ‘Hedge’

Hedge is a trade that protects another trade – so basically you become a broker – take money from one hand and give from another.

Hedge reduces the risk of adverse price movements in any trading object – equity or derivatives. A hedge is taking opposite position in same or related security. Pair trading for example is a part-hedge not fully hedged trading.

Basically hedge in an insurance for loss in trading especially derivatives. Like for medical emergencies we buy medical insurance, for accidental death we buy term insurance – same way for trading losses we can buy insurance.

Hedge reduces potential risk and limits the loss to a large extend. It also takes away some gains, but is a boon when the original trade is going for a huge loss. For overnight positions hedges are recommended. But hedge comes at at cost – it is not free.

For example when you could have made 10 points profits, hedge may reduce it to 7 points. But if you could have lost 10 points – hedge will reduce it to 3 points.

Therefore the joy of trading with a hedge is unmentionable. Imagine difference between a trader trading without hedge and a trader trading with hedge.

One is at a unlimited or huge risk and another is at limited profit or loss. A profit is a profit even if limited.

If you are still doing trading without hedge you can do my course and change your trading results from tomorrow itself.


WhatsApp or Call me: 91-9051143004

If you have any question you can contact me.

You can read about me here and my trading mistakes here.

TheOptionCourse.com Copyright @ All Rights Reserved
Dilip Shaw, Founder

Copyright Infringement: Any act of copying, reproducing or distributing any content in the site or newsletters, whether wholly or in part, for any purpose without my permission is strictly prohibited and shall be deemed to be copyright infringement.

INCOME DISCLAIMER: Any references in this site of income made by the traders are given to me by them either through Email or WhatsApp as a Thank You message. However every trade depends on the trader and his level of risk taking capability, knowledge and experience. Moreover stock market investments and trading are subject to market risks. Therefore there is no guarantee that everyone will achieve the same or similar results. My aim is to make you a better & disciplined trader with the stock trading and investing education and strategies you get from this website.

DISCLAIMER: I am NOT an Investment Adviser (IA). I am an Authorized Person (AP) of a Stock Broker. In other words I am a sub-broker. I DO NOT give tips or advisory services by SMS, Email, or WhatsApp or any other forms of social media. I strictly adhere to laws of my country. I only offer education for free on finance, risk management & investments in stock markets through the articles in this website. You must consult an authorized Investment Adviser (IA) or do thorough research before investing in any stock or derivative using any strategy given in this website. I am not responsible for any investment decision you take after reading any article in this website. Click here to read the disclaimer in full.

14 Lakh Loss Then A Loan For Survival
Checklist For New Stock Traders

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.

{ 0 comments… add one }

Leave a Comment

Menu