I was really thinking about this for last two days whether to go with hedging strategy but did not put in money because of the following reasons
first of all ...at this point I am bit bearish and thinking about short selling ....market is already in a overbought situations.
Strategy 1:
short nifty future this month expiry + long nifty future next month expiry.
=> if market tanks I can book profit from shorts.
however long nifty future in next month will also be in loss in same proportion ..though I'll get some time till next month to recover the loss ....but I don't think this is possible because nifty is not going to come back to 6000 level any more after a fall
...so there will be no chance of recovery of the loss
Strategy 2:
short nifty future this month + buy an OTM Call as an insurance
umm... worried about time decay if market is stuck and range bound eating premium ....doing nothing.
Do you see any good hedging strategy at this point ?