I am new to options trading. I would like to use as a hedge to investment against crash. Could you please guide which tools help in predicting propability for returns. I see sensibull but not sure what calls to be used. Can you please provide some suggestions.
If you are around 50% sure of the crash you need to buy equivalent of 5% of your portfolio on puts at 30% below, 3 months expiry and keep updating it
Nifty is 14300
So I’d buy puts at strike price of roughly 10,000 expiring July
Any hedge is a cost, there is no free ride. If there were, everyone would be doing it
So this hedge will cost you but will hopefully be offset by the gains you make on a crash one day as well as gains on stocks
At the end of may 2021, you’d close your July puts and buy august puts
Right now possibility of crash is low
I would rather have a thread discussing macro economics which help us determine when the possibility has increased to over 50%
Although macro economics point to bullish markets is still trade options to get a hang of it, when markets do turn
Thanks do we have any thread for macro economics . So I can monitor it.