Incisive Nifty Trend Analysis

[Option.Trader]

Generally my SL is quite wide, since my risk:reward profile favors it that way. My stop(hedge) for this trade will be 5879(spot) on a closing basis. I will confidently sell into this rally without a second thought. SL for bank nifty will be mapped to nifty SL. IMO, this is the last leg of the rally before the 'Golden crossover' takes place.

I think its a very sane strategy that you have suggested... to hedge with a call above your theoretical SL.. b'cos you can never find an ideal time to short or short at the high of day... I had taken tons of puts at 5755 and had my heart in mouth when it dropped 15% from my buy price... i think i'll use the call to hedge my position instead of putting a SL...But the better strategy would be to shift to May... as they say.. Sell in May and go away

 

[DSM]

Thanks Prada. A new trading insight. With a high conviction positional trade, to hedge against further loss by using options. This will be an additional trading tool/tactic instead of squaring off the position or getting SL'ed.

Generally my SL is quite wide, since my risk:reward profile favors it that way. My stop(hedge) for this trade will be 5879(spot) on a closing basis. I will confidently sell into this rally without a second thought. SL for bank nifty will be mapped to nifty SL. IMO, this is the last leg of the rally before the 'Golden crossover' takes place.

 

[Bewinner]

as they say.. Sell in May and go away

Who said that?

 

[Raghuveer]

Who said that?

From Investopedia:

Definition of 'Sell In May And Go Away'
A well-known trading adage that warns investors to sell their stock holdings in May to avoid a seasonal decline in equity markets. The "sell in May and go away" strategy is that an investor who sells his or her stock holdings in May and gets back into the equity market in November - thereby avoiding the typically volatile May-October period - would be much better off than an investor who stays in equities throughout the year.

 

[tssumit]

Hi prada what is the level on nifty you are looking at in the coming 2-3 weeks?

 

[Bewinner]

Hi prada what is the level on nifty you are looking at in the coming 2-3 weeks?

I think 5700 first then other tgt will be visible

 

[gunsho]

Prada, Spot closed above 5879. But it did on expiry day. So is this an exception or closed all shorts?

Generally my SL is quite wide, since my risk:reward profile favors it that way. My stop(hedge) for this trade will be 5879(spot) on a closing basis. I will confidently sell into this rally without a second thought. SL for bank nifty will be mapped to nifty SL. IMO, this is the last leg of the rally before the 'Golden crossover' takes place.

 

[subratdas]

Hi Prada, considering that nifty closed above 5910 ,do the market on verge of going up before it comes down to 5700 level.
Subrat

 

[prada]

Nifty update- This surprise rally has been quite powerful. I had anticipated this to set in once Nifty tested 5500, although not to this extent. In any case, we should get the hint of next move by the end of next week. Stay hedged until we get clarity that the counter trend has emerged.

Disclosure: I'm personally short in both Nifty and bank nifty and have been adding aggressive shorts further on rise. But my positions have been hedged yesterday.

 

[jamit_05]

Nifty update- This surprise rally has been quite powerful. I had anticipated this to set in once Nifty tested 5500, although not to this extent. In any case, we should get the hint of next move by the end of next week. Stay hedged until we get clarity that the counter trend has emerged.

Disclosure: I'm personally short in both Nifty and bank nifty and have been adding aggressive shorts further on rise. But my positions have been hedged yesterday.

How does one go about hedging a NF short position?

By buying same number of Calls? Of which month?

After such a strong rally it is one strong possibility that price goes sideways, this would cost the entire premium amount to decay.

Thank you.