There is a Nifty Futures 1 month contract and Nifty Futures 2 months contract, Mininifty futures 1 month contract and mininifty futures 2 months contract almost 4 identical products in a client terminal in any broker software for that matter.
Lets say I am taking a Nifty 1 month Futures position seeing how SGX Nifty fares, but I am seeing the trend going in reverse, then I hedge it by taking a 2 months contract in opposite position. (Buy in 1 month means sell in 2 months). Now I know the market is going in some direction and immediately I take a position of Mininifty in that direction. And have this open position last as long as possible while I gain out of mininifty alone. In case it is going the other way I can always hedge it or leave it for already i have one position in which I can book profit and since it is not going in one direction itself (Either bullish or bearish), I can book profit in rallies and wait for it to reach a favourable position to square off the other open position.
This minimizes all risks and can be done with ease I think. What do you all say?
Lets say I am taking a Nifty 1 month Futures position seeing how SGX Nifty fares, but I am seeing the trend going in reverse, then I hedge it by taking a 2 months contract in opposite position. (Buy in 1 month means sell in 2 months). Now I know the market is going in some direction and immediately I take a position of Mininifty in that direction. And have this open position last as long as possible while I gain out of mininifty alone. In case it is going the other way I can always hedge it or leave it for already i have one position in which I can book profit and since it is not going in one direction itself (Either bullish or bearish), I can book profit in rallies and wait for it to reach a favourable position to square off the other open position.
This minimizes all risks and can be done with ease I think. What do you all say?