≡ Menu

What Is Hedging?

Open ZERO Brokerage FREE Share Trading Account - Buy and Sell Stocks Without Brokerage - Set GTT (Good Till Triggered) Orders on System and Forget

Traditional brokers charge a lot for brokerage; however, this broker does not charge anything for stock buying and selling. Also, you can set GTT (Good Till Triggered) order after buying a stock, so that the system can sell the stock automatically at your target price even if you are not monitoring the market. Only 25k is blocked for option selling with hedge. Also, you get a lifetime free account in Sensibull (virtual trading app & strategy builder) which charges Rs.800/-+GST a month. Learn option hedging strategy if you open an account today. It takes 5 minutes to open an account online. Click here and Open Free Account with Them Today >>

Hedging is an insurance of a trade which comes into action when the original trade starts losing money. Hedging is a great way to protect your capital when trading or your portfolio as a whole.

Do you know that HIIs (High-Net-Worth Individuals) and DIIs (Domestic Institutional Investors) & FIIs (Foreign Institutional Investors) always hedge their portfolio against any odds. It does not matter they pay a price for hedging but they know very well the importance and necessity of hedging. They have crores at stake they are not fools to trade derivative naked (without hedge).

Options are a great hedging tool. The Institutional Investors use it perfectly to keep their account protected.

Hedging makes sure the losses if any are small and negligible. Institutional Investors DO NOT trade intraday, they are positional traders so they always use hedging to ensure smooth growth of their portfolio.

Its unfortunate that retail traders pay price for DIIs and HIIs hedging. Retail traders trade blindly while DIIs and HIIs take their money away.

Let me give you a simple example of hedging to help you understand how peaceful it can be.

Suppose you have a big portfolio of Nifty 50 stocks. More than 5 lakhs and they are in good profit but you do not want to sell. In that case how do you protected your profits? You can buy puts to protect a huge fall in Nifty. If your stocks fall, its obvious that the stocks in your portfolio will also fall. But since you have bought hedging you do not have to bother much. The put you bought will make you some money. But by chance Nifty does not fall the put will expire worthless. I hope you can understand that hedging comes into action only when your hard earned money is in threat of going away. Otherwise they keep quite.

But as in above example if stocks fall the person who has bought puts will make some money out of it and his loss will not be as big as someone else loss who did not hedge.

This is just a small example of how hedging can help you survive the volatility of the markets. Hedging is a must for positional traders. Without hedge you will not be able to save your capital if anything goes wrong in your trades. 2 or 3 big losses may wipe out your capital.

Therefore in the ever uncertain markets it is very important to learn hedging. You can do my Nifty option course to learn how to hedge properly options, futures and equities to make a monthly income.



TheOptionCourse.com © Copyright Since 2013 ® All Rights Reserved

Click to Share this website with your friends on WhatsApp


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. I do not give tips or advisory services by SMS, Email, WhatsApp or any other forms of social media. I strictly adhere to the laws of my country. I only offer education for free on finance, risk management & investments in stock markets through the articles on 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 on this website. I am not responsible for any investment decision you take after reading an article on this website. Click here to read the disclaimer in full.


Disclaimer | Privacy Policy | About Me | Conservative Option Course | Bank Nifty Weekly Options Strategy
Find 200+ testimonials of my course on these pages too posted year-wise:
What Traders Say About This Course
Testimonials Year 2015
Testimonials Year 2015 Page 2
Testimonials Year 2015 & 2016
Testimonials Year 2016
Testimonials Year 2017
Testimonials Year 2018
Testimonials Year 2019
Testimonials Year 2020
Testimonials Year 2021
Testimonials Year 2022
Testimonials Year 2023
Testimonial of one of my client making 25k per week
Emotional Testimonial by a Young Woman Trader and Her Mother
Difference Between other Courses and Mine
What others charge for online courses
What People Say Just After Doing My Course
Bank Nifty Course Testimonials

My student gets the Winner's Certificate of Zerodha 60-day Challenge - Click here and Open Stock Buy and Sell Free Account with Them Today!!!

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 Stock Buy & Sell Free Account with Them Today >>

About the author: Dilip Shaw 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