nifty put options 2500

vkwd7

New Member
#1
yesterday 5-3-09 I bought 2 nifty puts 2500 strike @ rs72/- , when the market nifty was at 2582 about . My guess was that the market would break 2500, but today it is at 2620 and the rate of 2500 puts is at 44. Although I feel strongly that the market would breach 2500, but in case it further goes adverse to my position what strategy i should adopt:
1)quit at 40/-
2) buy 2 or 3 more puts to bring down the average to about 45/- and then square of at some profit or break even or minimum loss.
3)buy nifty futres 2 lots.
4) shift to april 2500 puts.
I shall be thankful if experienced traders give advise to a newbie.
thanks
vkwd7
 

bandlab2

Well-Known Member
#2
averaging in options is not a good idea. i would say by tomorrow close if nifty doesnt go down below 2600 spot, then square off at whatever price u get
 

AW10

Well-Known Member
#4
Few suggestions from my experience..

1) quit at 40/-
Put your stoploss price and get out at that price. "Hope" does not work in mkt.

2) buy 2 or 3 more puts to bring down the average to about 45/- and then square of at some profit or break even or minimum loss.
Do not average a loosing position. Most likely, You will be accumulating your losses and emotional attachment to your position. Both are not good trading practice.
To be long term winner here, Trade what u see.. not what u think.

3)buy nifty futres 2 lots.
It is seperate trade all togather. It is not hedging of your Long PUT position.

4) shift to april 2500 puts.
If your reading of market says that by april expiry, market will be below 2500 minus the premium that u pay for this option, then u can buy this option.
If you have doubt about market reading, then better stay away from this. Options are time decaying asset and every day, market goes against your position, you will be loosing the premium. (even if mkt goes your way, but does not go fast enough, you will end up loosing premium). So take care in selecting right directoin and right strike price.

Happy Trading
 

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