Hi Raunak,
I have bought 5400CE @110 to protect my position in NF sold
@5445. Just want to understand how protection will work. I am planning to hold this position till Aug end. There may be two cases at the end of Aug.
1. Nifty @5200: I will be in profit as my lower breakeven will be
5335(5445-110)-5200=135point.
2. Nifty @5700 : I will be in loss. My call will be @300. Hence net gain in call will be 190point(300-110) but I will be loosing in NF 255 points(5700-5445). So my net loss will be 65 points(190-255)
Am I correct in my understanding?
My view is bearish on market. In this case should I put some stoploss if market starts moving upside?
Is there any point where I should reverse my trade?
OR should I add further lots for my barish view if market move up further?
Pls advice.
I have bought 5400CE @110 to protect my position in NF sold
@5445. Just want to understand how protection will work. I am planning to hold this position till Aug end. There may be two cases at the end of Aug.
1. Nifty @5200: I will be in profit as my lower breakeven will be
5335(5445-110)-5200=135point.
2. Nifty @5700 : I will be in loss. My call will be @300. Hence net gain in call will be 190point(300-110) but I will be loosing in NF 255 points(5700-5445). So my net loss will be 65 points(190-255)
Am I correct in my understanding?
My view is bearish on market. In this case should I put some stoploss if market starts moving upside?
Is there any point where I should reverse my trade?
OR should I add further lots for my barish view if market move up further?
Pls advice.
Anyway with the strategy you have mentioned, I think you should be fine. Only concern is options eating away your profit. However, if you are a conservative trader, then this should work out well for you.
Whether markets will move up or not is difficult to answer. Indications have been for long that weakness is lurking underneath. But when does it materialize is something very difficult to answer.
Keep a SL of 5575 - 5600 in mind. I doubt we will reach 5600 levels. But then, I have been proven wrong so many times that it makes me feel really old at times. This is where Risk management comes into the foray.
Tc