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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.
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What you should do now1. If you have still not subscribed for my free 5 days course you can do by filling the form above. You will learn a lot about option trading.
2. If you are a new option trader, not much experienced and are making losses you can do my paid course. I recommend Nifty Conservative Option Course for beginners because it is easy to understand and easy to trade. Even a 18 year old young trader or a housewife can learn it and start trading from next day. It will help you to earn consistent monthly income without any software or speculation or stress or big risk. You will learn proper hedging strategies that works in any market condition.
3. If you are banknifty weekly options trader you can do my Bank Nifty Weekly Options & Futures Strategy Course. You will learn future and option hedging strategies that works in volatile market condition.
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Course fees: Click here to know the course fees.
Here is complete process of my course1. Once you pay I will send you the course materials for studying to your email.
2. You read and ask me questions via phone/whatsapp/email to clear doubts.
3. Then you start paper trading and still can ask me questions.
4. After about one month you can start trading.
5. Since doubts can come anytime the support will be there for one year.
Within one month you can start trading on your own. No need to depend on anyone once you are on your own.
If you have any question you can contact me.
You can read about me here and my trading mistakes here.
Dilip Shaw, Founder
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. Please note that I DO NOT give tips or advisory services by SMS, Email, or WhatsApp or any other form of social media. I strictly adhere to laws of my country. I only offer education on finance, investments on stock markets in the best possible way as much as I can through this website. Still, you must consult an authorized advisor or do thorough research before investing in any stock or derivative before trading any strategy given in this website. I am not responsible for any investment decision you take after reading any article given in this website. Knowledge is the only way to get success in stock markets. I try my best to give stock market investing and trading knowledge through the articles posted in this website. Thanks for visiting my website.