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Future & Option Hedging Strategy

Discuss Future & Option Hedging Strategy at the Introductions within the Traderji.com; Hi All, I was searching for some hedging strategies for nifty future and I came ...


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  #1  
Old 5th January 2017, 03:16 PM
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Default Future & Option Hedging Strategy

Hi All,

I was searching for some hedging strategies for nifty future and I came to know a best strategy for it.
"Hedge Nifty options with Future"

This is the best strategy I have found till now. But it was posted before 7 years ago and then no updates from the admin after that.

So, I want to re-start that discussion here.


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Last edited by suryameet25; 6th January 2017 at 12:33 PM.
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  #2  
Old 6th January 2017, 12:28 PM
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Default Re: Future & Option Hedging Strategy

So, Friends this strategy is for a return of 20-40% monthly with investment of Rs.75000

Right Now Nifty Spot is trading at 8273.

Sell Call & put for next month

Sell 8100 FEB Call
Sell 8400 FEB Put

Buy Nifty Future if above 8295 and hold till it reach back to 8295.
Sell Nifty Future If below 8255 and hold till if reach again to 8255.

In this way you will always make profit in every market condition.

In Sideways market both premiums will loss their value and you will gain points.
In Bull market you will make more with Nifty Buy + Sell Put
In Bear market you will make money with Nifty Sell + Sell Call

Target here is for 200 points.

Note: We have to exit only when we have 200 points profit..

So, No matter where nifty is trading.. Only exist Nifty future if it reach again to your Buy/Sell price..
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  #3  
Old 6th January 2017, 09:10 PM
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Default Re: Future & Option Hedging Strategy

Dear brother
Strategy seems to be good. I am new to option. I hope the delta value for all the three legs have been taken into account. I will be paper trading this strategy.
Any other strategy
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armaheshchandru
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Old 6th January 2017, 10:08 PM
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Default Re: Future & Option Hedging Strategy

Quote:
Originally Posted by suryameet25 View Post
So, Friends this strategy is for a return of 20-40% monthly with investment of Rs.75000



Right Now Nifty Spot is trading at 8273.



Sell Call & put for next month



Sell 8100 FEB Call

Sell 8400 FEB Put



Buy Nifty Future if above 8295 and hold till it reach back to 8295.

Sell Nifty Future If below 8255 and hold till if reach again to 8255.



In this way you will always make profit in every market condition.



In Sideways market both premiums will loss their value and you will gain points.

In Bull market you will make more with Nifty Buy + Sell Put

In Bear market you will make money with Nifty Sell + Sell Call



Target here is for 200 points.



Note: We have to exit only when we have 200 points profit..



So, No matter where nifty is trading.. Only exist Nifty future if it reach again to your Buy/Sell price..


What if NIFTY opens gap down when I am LONG on NIFTY Futures?



Sent from my iPhone using Tapatalk
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  #5  
Old 7th January 2017, 11:46 AM
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Default Re: Future & Option Hedging Strategy

Quote:
Originally Posted by suryameet25 View Post
So, Friends this strategy is for a return of 20-40% monthly with investment of Rs.75000
Sell 8100 FEB Call
Sell 8400 FEB Put
Buy Nifty Future if above 8295 and hold till it reach back to 8295.
Sell Nifty Future If below 8255 and hold till if reach again to 8255..............
So, No matter where nifty is trading.. Only exist Nifty future if it reach again to your Buy/Sell price..
This won't stick all the time, bcos of IV.
Remember, IV doesn't affect the Futures, and IV & Vega can also be different on either leg.
IV isn't the same for 8300 CE & PE for eg.

1. Key to making money of Options is to sell them very early.
2. Selling Options when Volatility is low works against the plan, you have to forecast mkt conditions during their expiry.
That means you have to time when you will Sell which isn't easy.

Last edited by travi; 7th January 2017 at 11:52 AM.
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Old 7th January 2017, 12:47 PM
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Default Re: Future & Option Hedging Strategy

Quote:
Originally Posted by suryameet25 View Post
So, Friends this strategy is for a return of 20-40% monthly with investment of Rs.75000

Right Now Nifty Spot is trading at 8273.

Sell Call & put for next month

Sell 8100 FEB Call
Sell 8400 FEB Put

Buy Nifty Future if above 8295 and hold till it reach back to 8295.
Sell Nifty Future If below 8255 and hold till if reach again to 8255.

In this way you will always make profit in every market condition.

In Sideways market both premiums will loss their value and you will gain points.
In Bull market you will make more with Nifty Buy + Sell Put
In Bear market you will make money with Nifty Sell + Sell Call

Target here is for 200 points.

Note: We have to exit only when we have 200 points profit..

So, No matter where nifty is trading.. Only exist Nifty future if it reach again to your Buy/Sell price..
Disagree with this view.........

Can u ...please show last one year...what happened...with this strategy...

Nothing against your strategy...want to understand 20% return per month is ...that much easy ?
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  #7  
Old 8th January 2017, 01:17 PM
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Default Re: Future & Option Hedging Strategy

Which broker allows selling a pair of Options plus one lot of futures in 75k?
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Old 9th January 2017, 03:12 PM
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Default Re: Future & Option Hedging Strategy

If your strategy is about eating premiums decay, just check it for Mar 2016.
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Old 10th January 2017, 01:40 PM
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Default Re: Future & Option Hedging Strategy

Quote:
Originally Posted by tarun1313 View Post
What if NIFTY opens gap down when I am LONG on NIFTY Futures?



Sent from my iPhone using Tapatalk
It doesn't always happen that nifty will open with 200-300 points gap. It rarely happens.. We can understand a gap down of 20-50 points..

If Nifty opens a Gap Down then follow this rule:

Next time Trade with 2 lots of nifty in place of one lot.. and exit one lot as soon as you got your loss points because of Gap down..
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Old 10th January 2017, 01:43 PM
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Default Re: Future & Option Hedging Strategy

Quote:
Originally Posted by Rish View Post
Disagree with this view.........

Can u ...please show last one year...what happened...with this strategy...

Nothing against your strategy...want to understand 20% return per month is ...that much easy ?
Rish,

As I told above I have not made any trade on this formula. I found it when I was searching for the best strategy, And It looks good to me.

I put it here to share/get other's views on it..

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