Nifty 2800

I have 2lot RIL 1500 put @50 and now 25. Short 5lot Nifty fut @ 3175...All are April Exp. Now I am in big loss....What should do now? Should I exit? Do you think Nifty will come down to 3000 level at this month? Pls suggest.....

I have 2lot RIL 1500 put @50 and now 25. Short 5lot Nifty fut @ 3175...All are April Exp. Now I am in big loss....What should do now? Should I exit? Do you think Nifty will come down to 3000 level at this month? Pls suggest.....

as for your 5 lots of nifty shorts, i suggest you short 5 lots of 3200 puts. that will give you sufficient protection on the upside. nifty has broken out of its 5 months trading range, so protection from upside is essential, if you dont want to book losses....

I dont track RIL options so am not competent to comment on that.

1 piece of advise for you future trades. always hedge your positions before you carry your trades for the next day. market is like the joker from batman-dark knights movie. irrational... and loves chaos. you cant predict its moves, no one can.

best of luck...you'll need it....


linkon7

ps : dont take mine or anyone's advise without checking out for yourself. Its your money, your decision.

Brother a little advice want to take from u
U told him to short 3200 put instead of taking call
u know if nifty remain at 3250 for a week what will happen he will lose patience and his short put will remain around the same price where they are ???
so instead of writing put why not go for next mnth 3200 call???
Its a querry dont take it as trade suggestion pls anyone can reply

theoretically, if you are short on nifty and short on ITM put, then if the market rallies, your put will loose value almost 70-80% as fast at the nifty rise. you get a chance to cover the NF short and regain the lost points from the put.

If nifty falls then u cover the put and wait till u recover points from NF.

and if NF consolidates around 3250 then the put will loose (time ) value. call option next month will also loose value but the rate of decay will be a slower. so buying 3200 call is also a good hedge. somehow, i dont like buying options. I prefer to be on the sell side. time becomes your friend.


linkon7


ps : i reserve the right to be wrong.

theoretically, if you are short on nifty and short on ITM put, then if the market rallies, your put will loose value almost 70-80% as fast at the nifty rise. you get a chance to cover the NF short and regain the lost points from the put.

If nifty falls then u cover the put and wait till u recover points from NF.

and if NF consolidates around 3250 then the put will loose (time ) value. call option next month will also loose value but the rate of decay will be a slower. so buying 3200 call is also a good hedge. somehow, i dont like buying options. I prefer to be on the sell side. time becomes your friend.


linkon7


ps : i reserve the right to be wrong.

Linkon
Is it possible to buyback the put anytime or do we need to wait till expiry
(I'm novice in options)