I dont trade in F&O's nor do I trade much in cash too. I just struck with this idea and thought of posting it here to have all you guys' opinion on it. Supose a certain stock or the market in general is in a certain trend, uptrend or downtrend, not moving sidewise. Lets assume its going upward. Now, you buy a future (of stock or nifty) at certain price, say Rs X and you buy same value (total value of future contract) of put option at strike price of Rs X and pay premium of Rs Y. Now, if the price moves up as predicted by you and you close your future position at price Z, then you make profit on your future contract and you lose preminum paid on put contract since it expires worthless. So, the effective profit will be Z-X-Y and you will brekeven at X+Y price of the future contract. In the unfortunate event of your predictions going wrong and your stock or nifty declines, so you will make a loss on the future contract, but you can exercise your put option and sell the stocks or nifty at Rs X effectively nullifying your loss in future contract. In this case, you would only lose the premium paid in put contract. The reverse can be also true in case stock or markets is trending downward and you sell a future contract and buy a call option and protect yourself from increase in prices. Could you guys please comment on this strategy. Are my assumptions correct?