How to trade nifty options basics

Enriching Investors Since 1998.
Profitable Trading Solutions for the Intelligent Investor.
Beginners Guide to Options.
What is an option?
An option is a contract giving the buyer the right, but not the obligation, to buy or sell an underlying asset (a stock or index) at a specific price on or before a certain date.
An option is a derivative. That is, its value is derived from something else. In the case of a stock option, its value is based on the underlying stock (equity). In the case of an index option, its value is based on the underlying index (equity).
· Listed Options are securities, just like stocks.
· Options trade like stocks, with buyers making bids and sellers making offers.
· Options are actively traded in a listed market, just like stocks. They can be bought and sold just like any other security.
· Options are derivatives, unlike stocks (i. e, options derive their value from something else, the underlying security).
· Options have expiration dates, while stocks do not.
· There is not a fixed number of options, as there are with stock shares available.
· Stockowners have a share of the company, with voting and dividend rights. Options convey no such rights.
Some people remain puzzled by options. The truth is that most people have been using options for some time, because option-ality is built into everything from mortgages to auto insurance. In the listed options world, however, their existence is much more clear.
Types Of Expiration.
There are two different types of options with respect to expiration. There is a European style option and an American style option. The European style option cannot be exercised until the expiration date. Once an investor has purchased the option, it must be held until expiration. An American style option can be exercised at any time after it is purchased. Today, most stock options which are traded are American style options. And many index options are American style. However, there are many index options which are European style options. An investor should be aware of this when considering the purchase of an index option.
An option Premium is the price of the option. It is the price you pay to purchase the option. For example, an XYZ May 30 Call (thus it is an option to buy Company XYZ stock) may have an option premium of Rs.2.
The Strike (or Exercise) Price is the price at which the underlying security (in this case, XYZ) can be bought or sold as specified in the option contract.
The Expiration Date is the day on which the option is no longer valid and ceases to exist. The expiration date for all listed stock options in the U. S. is the third Friday of the month (except when it falls on a holiday, in which case it is on Thursday).
People who buy options have a Right, and that is the right to Exercise.
When an option holder chooses to exercise an option, a process begins to find a writer who is short the same kind of option (i. e., class, strike price and option type). Once found, that writer may be Assigned.
There are two types of options - call and put. A call gives the buyer the right, but not the obligation, to buy the underlying instrument. A put gives the buyer the right, but not the obligation, to sell the underlying instrument.
The predetermined price upon which the buyer and the seller of an option have agreed is the strike price, also called the exercise price or the striking price. Each option on a underlying instrument shall have multiple strike prices.
Call option - underlying instrument price is higher than the strike price.
Put option - underlying instrument price is lower than the strike price.
Call option - underlying instrument price is lower than the strike price.
Put option - underlying instrument price is higher than the strike price.
The underlying price is equivalent to the strike price.
Options have finite lives. The expiration day of the option is the last day that the option owner can exercise the option. American options can be exercised any time before the expiration date at the owner's discretion.
A class of options is all the puts and calls on a particular underlying instrument. The something that an option gives a person the right to buy or sell is the underlying instrument. In case of index options, the underlying shall be an index like the Sensitive index (Sensex) or S&P CNX NIFTY or individual stocks.
An option can be liquidated in three ways A closing buy or sell, abandonment and exercising. Buying and selling of options are the most common methods of liquidation. An option gives the right to buy or sell a underlying instrument at a set price.
Options prices are set by the negotiations between buyers and sellers. Prices of options are influenced mainly by the expectations of future prices of the buyers and sellers and the relationship of the option's price with the price of the instrument.
The time value of an option is the amount that the premium exceeds the intrinsic value. Time value = Option premium - intrinsic value.
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Learn How To Trade Options For Monthly Income.
Do You Know You Can Make Money Trading Options Without Leaving Your Job?
In short: You will get 5 Option & Future strategies and a bonus strategy of 38% a month (your results may differ), plus my support for next six months. If you have any doubts even while live trading you can ask me. You also get a Basic Option Course to know about Option Greeks. If you want, I will make the first trade for you. Fees details here.
How many times have you traded options and futures and lost money? If you are trading on hope you are losing money. If you are trading direction you are surly losing money. Because when you cannot predict your own future how can you predict the direction of a stock? What if you learn a trade where predicting direction of a stock is NOT required? Yes money can be make trading options and futures even without knowing or predicting the direction. It is called NON-Directional Trading. On top of that there is a way to buy insurance for a trade to keep your capital protected.
Before reading further just see one testimonial from one of my client who did the course. See his one month profit – Rs.4.05 Lakhs – Your results may vary.
Testimonial by Ravindra from Pune – 10.65% Profit Intraday Rs.4.05 Lakhs in Directional Strategy of My Course – Results may vary for users.
Rs.16.26 Lakh profit on Rs.38 Lakh margin blocked. 42.78% return in 5 trading days – Results may vary for users.
One Time Fees For The Conservative Options & Futures Course & Support on for Six Months is Rs. 5000/- Only.
Once you enroll for the course you will get all the 5 strategies and a bonus strategy of 38% a month made by one of my client in your within 24 hours of your payment. Your results may differ. You will get my personal support on only till you are successful trading my strategies. You will get support to understand the strategies for SIX (6) months. You will get IMPORTANT s with ideas to trade my strategies and other ideas on trading till you are successful trading my strategies. I will continue support up to 6 months from the date of enrollment. With the help of my support s you will get many ideas to trade on Nifty as well as on stocks. These s DO NOT go to free subscribers. One time fees only for course and support for 6 months is FREE. You Do Not Have to pay anything more.
One Time Fees For The Conservative Options & Futures Course & FREE Support on Phone, WhatsApp and for Six Months is Rs.6000/- Only.
Once you enroll for the course you will get all the 5 strategies and a bonus strategy of 38% a month made by one of my client in your within 24 hours of your payment. Your results may differ. You will get my personal support on Phone + WhatsApp + till you are successful trading my strategies. You will get support to understand the strategies for SIX (6) months. You will get IMPORTANT s with ideas to trade my strategies and other ideas on trading till you are successful trading my strategies. I will continue support up to 6 months from the date of enrollment. With the help of my support s you will get many ideas to trade on Nifty as well as on stocks. These s DO NOT go to free subscribers. One time fees only for course and support for 6 months is FREE. You Do Not Have to pay anything more.
Course Explained:
Total 5 strategies: You get two conservative non-directional option trading strategies which are profitable 80% of the times. You also get two directional conservative strategies to trade when markets are moving fast due to news. You NEED NOT be correct in predicting the direction. The trade makes money in BOTH directions. You also get one great stock option strategy.
Losses are limited, small and manageable. These strategies can make good money every month. To know exactly how much you can make please contact me.
Strategy 1) Very conservative: Non-Directional Nifty Options. You have to trade this every month. This trade benefits from time decay of both Calls and Puts. As you know Nifty is mostly range-bound, so you win. When it trends a lot then we take a stop-loss of just 1% because of the hedge and we go to Strategy 2 to recover our money. The hedge will save you from a big loss. Most of the times this trade will be in profit.
Strategy 2) Conservative: To be played only when stop-loss is hit in Strategy 1. I have developed a plan to ensure that even if you take a stop loss in Strategy 1 – the Strategy 2 will give you back that money plus some more in profits. Why? Because for Nifty has to travel 1000 points one direction in 40-60 days, which is near impossible. Which means combine Strategy 1 and 2 – there will be rarely a loss. Success rate of this strategy is 90%. We will double the number of lots here so that losses are recovered and you make a small profit.
IMP NOTE: Strategy 1 and Strategy 2 combined you will rarely see a loss month in years. The above two strategies itself is worth the course fee. If you are losing money its highly recommended that you do this course. Rest of the strategies can make more but are slightly aggressive.
Strategy 3) Aggressive: Stock Options. Only when a stock gives us an excellent opportunity to trade. I will tell you how to know that. It makes good money if stop loss in NOT hit. When you call me I will tell you how much you can make. If stop loss is hit it is even better as the money goes into triple leverage – it makes money from three places. If stop loss is hit, there is a proper way to recover loss plus make the same profit if the trade did not hit stop loss. Until recovery you keep getting some money as monthly income. Since the recovery and profits is almost certain, I call it the no loss strategy. You will need some cash if stop loss is hit. This is a great trade for traders who have lot of stocks in their Demat account.
Strategy 4 and Strategy 5 are the Directional Aggressive Strategies where Futures is hedged with Options. If correct Futures makes money if wrong Options make money. Here if you are badly wrong in Futures you can make very good profits. If correct you still make money.
When you know that losses are less and profits more, you can be fearless in compounding your money over the years to make good money .
Note: When there is volatility you should take small risks to increase returns from your account. To help you make more money I will also tell you 2 conservative directional strategies that involves Future trading with options hedging. These strategies make more if you are right, but lose less if you are wrong. If you are horribly wrong, you will make a lot of money. 🙂 One of my clients made 38% return* in one month in this strategy even when he was wrong. You will know his trade as well. *Results may vary for users.
Another benefit of this directional strategy is that as the position is properly hedged you need not take a stop-loss. Like I said, you can decide when to take the profits. This trade makes money both sides, so you can just wait for the right time to take your profits out. You lose money only if Nifty movement is very slow for a full 30 days. How many times does that happen?
After the trading course I will give support for a few months from the date of order of course. How many people give this kind of service?
Why I Started This Website & Course?
I see that lot of traders are fooled by tips providers / advisory services – me too – I lost 7 lakhs trading their tips and speculative trades myself from 2007-2010. Well no more, because I took to learning stock trading myself seriously and today am happy I lost that money because it was that failure that made me the person I am today.
Are you interested in getting a 5 day free course to learn trading options properly? If yes, submit your in the form below. The course will start from tomorrow for next 5 days, delivered directly to you . Read at your own leisure.
11 Reasons Why You Should Do This Course:
1. Technical Analysis Knowledge NOT required – Read to know why I do not believe in Technical Analysis. But it good for Back Testing. See one of my client did back testing on my strategies and he found it working well in all market conditions.
3. Regular Monitoring NOT Required – Stock trading is not watching stocks.
4. Continue with Your Job – Yes just because you are trading does not mean you have to leave your job.
5. Do Course From Your Home – Why go anywhere when due to Internet we can still be connected?
6. 100% Hedged – This is PURE INSURANCE Trading.
7. Stress-Free Trading – Making money should not come with stress.
8. Scaling Possible – As you age you will have more money, and if you are a good trader it is always better to trade with more money.
9. One Time Fee – Its a course not tips that you have to pay every-month and lose.
Testimonial by a Technical Analyst an Expert Trader – Results may vary for users:
60% Profit Using Just Strategy 1 In A Financial Year – Results may vary for users:
He is owner of a very popular trading software company:
Testimonial by Housewife Trader – Results may vary for users:
How The Course Is Conducted?
This is the first question traders ask me when they call me. I do not call anyone, traders interested in the course call me. And this is the first question they ask. Here is how the course is conducted:
Step 1. You will read below that you will get 5 conservative option and future strategies and one bonus trade done by my client to get more returns than I ever thought was possible once you enroll for the course. Details on the strategies is written below.
Step 2. If you feel like doing the course you pay the course fee. Click here to know the course fee – it will open in a new window. Please read, it is not high at all, in fact it is less than your one loss.
Step 3. Once the fee is paid you inform me by contacting me here or on whatsapp on my number 9051143004. Please tell me your name, , and payment details.
Step 4. Within 24 hours of the payment I will send you the strategies in your . I have myself written these strategies in 4 PDF files which I will send as an attachment to your .
Step 5. You can read these strategies whenever you want when free. Please read twice before asking me questions.
Step 6. Though it is written in a easy to understand language, it is obvious you may have doubts. After reading twice please ask me questions and clear your doubts. No one in India gives that much time as a service to educate proper hedging strategies to help you become a better trader, for a one time fee. Most of them ask upwards of Rs.30,000 or a monthly fee. Here you just have to pay only once.
Step 7. If you paid only for support you can ask questions via . If you paid for all three support you can clear your doubts via , whatsapp and phone. If the questions are long please as you will have the backup, if short please whatsapp, if instant please call.
Step 8. Support will be till the time written in the fee details page.
Step 9. From next day onward you will start getting s to help you know what strategy to trade and what may happen to the stock markets. These s are not sent to free subscribers. These s are not advisory service or tip providing service, they are given to help you become a better trader and trade the correct strategy.
One Time Fees For The Conservative Options & Futures Course & Support on for Six Months is Rs. 5000/- Only.
Once you enroll for the course you will get all the 5 strategies and a bonus strategy of 38% a month made by one of my client in your within 24 hours of your payment. Your results may differ. You will get my personal support on only till you are successful trading my strategies. You will get support to understand the strategies for SIX (6) months. You will get IMPORTANT s with ideas to trade my strategies and other ideas on trading till you are successful trading my strategies. I will continue support up to 6 months from the date of enrollment. With the help of my support s you will get many ideas to trade on Nifty as well as on stocks. These s DO NOT go to free subscribers. One time fees only for course and support for 6 months is FREE. You Do Not Have to pay anything more.
One Time Fees For The Conservative Options & Futures Course & Support on Phone, WhatsApp and for Six Months is Rs.6000/- Only.
Once you enroll for the course you will get all the 5 strategies and a bonus strategy of 38% a month made by one of my client in your within 24 hours of your payment. Your results may differ. You will get my personal support on Phone + WhatsApp + till you are successful trading my strategies. You will get support to understand the strategies for SIX (6) months. You will get IMPORTANT s with ideas to trade my strategies and other ideas on trading till you are successful trading my strategies. I will continue support up to 6 months from the date of enrollment. With the help of my support s you will get many ideas to trade on Nifty as well as on stocks. These s DO NOT go to free subscribers. One time fees only for course and support for 6 months is FREE. You Do Not Have to pay anything more.
How Much Can You Make If you Do My Options and Futures Course?
You see not all traders are same. So some will get exceptional returns and some average. Like This – Ravi Excellent Trader Makes Rs. 16.26 Lakhs Profit in 5 Days – Results may vary for users. See the proof of 5 days trading profits made by him:
Rs. 16.26 Lakhs profits on Rs. 38 Lakhs margin blocked. 42.78% return in 5 trading days – Results may vary for users.
First Trade according to my strategy with amazing profits:
Testimonial by Ravindra – 10.65% Profit Intraday Rs.4.05 Lakhs in Directional Strategy of My Course – Results may vary for users.
Click here to see his profits day by day. Please remember that results are typical and may vary from trade to trade. Such amazing profits are not possible in every trade. The trader has written on how he achieved such amazing results. Click here to read his white paper.
Very Imp Disclaimer: These results like 10.65% profit are typical and its not guaranteed that every trade will produce the same or similar results. However the hedging methods in the course will help you to take such aggressive trades even with a lot of cash, because you know that capital protection is there no matter what. Smart traders will always make more.
Want to see more testimonials? I would request you to read testimonials and reviews of the course by real traders here – and see how they are making good profits. (Results may vary for users.)
Another trader who is not a full time trader with amazing returns:
Testimonial by Mr. Inder – Results may vary for users.
If you subscribe for this course, you will get his trade details and know how he made such a good return in such a short time.
NOTE: Mr. Inder’s trade will be given as bonus to all paid subscribers of the course the same day along with all other strategies. Both Ravi and Mr. Inder are still doing good with the directional but hedged strategies written in my course. As Mr. Inder has no issues sharing his trade this is given as a bonus to all paid subscribers to improve their returns. His idea needs a little bit of practice, then you can improve your returns from trading this strategy. It may take some time but with efforts results will show.
NOTE: Mr. Inder traded the conservative directional strategy in the course. 11% return in 1 trade is typical and may not happen in every trade. Testimonial was sent without asking as a comment. Mr. Inder made a total profit of 37.8% on margin blocked. He made MORE when he was WRONG in his Future trade. If you take the course I will send his real trades for your learning and proof. Not every trade can bring such results. Your results may differ.
Before reading further please understand, and I hope you will agree with me that, education helps for life not one or two days . By getting tips you not only lose money but also time. In the end you learn nothing and get frustrated. Therefore education is more important than tips . How many people who have taken tips have become very rich trading stock markets by taking tips? NONE . But people like Warent Buffet (the BEST stock trader the world has ever produced), are highly educated and never take tips. These people invest money only in knowledge to become better traders. You went to school for education, therefore you got a good job. Imagine the return on investment education gives. Today your six month’s salary is much more than your entire fee of school and college. This is the return on investment knowledge can give .
I have been trading options successfully since 2011. Before that I was losing money trading the stock markets, because I lacked knowledge of trading. From 2007 to 2010 I lost more than Rs.7 lakhs which was 100% of my savings. I did a lot of mistakes while trading. You can read my mistakes here and know the common trading mistakes traders do. You can read some option strategies written by me here. All are written with real option premium provided by NSE at the time of writing. I also try to help my subscribers trade well through my free newsletters for life which you can sign up here:
I offer an Options and Futures trading course to help you trade profitably: You Learn How To Trade Non-Directional Option Strategies “Conservatively” For Monthly Income with Peace of Mind!
Here Are Some Benefits Of My Course, There Are More Actually But You Will Know Only After You Do It.
No need to go anywhere, you can do this course from your home Technical Analysis (TA) knowledge is NOT required NO Software Required Strike Selection will be Taught NO need to monitor your trades every second or minute or even for hours, so, You can continue with your job/business while the trades make money for you in the background, Last 2 years back-testing done strategies work in MOST market conditions, You need Rs. 75,000/- only to start trading my strategies, but the more the better to get the benefit of compounding, Pay once, learn and trade yourself profitably for life, so, NO need to depend on so called “Tips Providers” and lose money trading their tips (I have lost too) I will support you personally to understand the strategies well on , phone and whatsapp. No one in the World does that for such a low price. I want you to become a better trader after the course that’s my aim and I will work hard to make sure it happens. For more information me, or Call/WhatsApp me on: 9051143004.
Important Features – These are some of the most common questions asked by traders.
Q 1. What is the accuracy of your strategies?
Ans – You see this is stock trading. Risk is there but because the strategies are properly hedged, risk is reduced considerably. Accuracy is 75-80%. Risk is low because its hedged and planned disciplined trading, therefore it gets reduced to 2% on margin blocked.
Q 2. How much draw-down can come in my trading account if I trade the strategies?
Ans – As written earlier: 2%-3% max.
Q 3. Is it for intraday or positional trading? If positional what happens in gap up or gap down next day?
Ans – Its not intraday, its positional. The strategies are properly hedged, so basically you become a broker. You lose in one hand and gain in another hand. It is only the difference that you pay. Sleep well in the night, do not worry. Proper hedging will take care of your hard earned money. That is why even in huge gap up or gap down, you will lose maximum of 2-3% on margin blocked.
Q 4. Does your strategy provide clear entry, exit, stop loss and risk management?
Ans – Yes it does. In fact you are paying exactly for this. Strike selection (here is where most traders go wrong in options trading), Buy or Sell which strike, Call or Put, When to Enter & When to Exit with Profits, Where exactly to take a Stop Loss, What to do after taking a Stop Loss to Get Your Money Back (Strategy 2), How to Hedge Options with Options, How to Hedge Futures with Options, etc. A lot of things are there in the course to learn. The aim of the course is to make you a good trader for life, not just one or two days.
Q 5. Can I make Option Trading as Full Time Business? If yes then how much capital I need to invest?
Ans – You see stock trading is a business like any other business. Even when you open a shop at least Rs.50 lakh is required. 3-5% per month is what you make on blocked margin. It depends on how much you want to make per month to earn a living. Now this is simple interest mathematics. That said some traders, as you have seen above, like Ravi and Inder are doing much better. In fact these kinds of students are doing better than me and make me proud. If you can also enter that league, it will be great, and you will also make me proud.
Q 6. How much return can I expect consistently if I follow your strategy with all rules?
Ans – Over one year period, anywhere from 30% to 40% Compound Annual Growth Rate (CAGR). Please note that your results may vary depending on after doing my course, how good a trader you become.
Q 7. Is it true that some signal providers from some states have inside information? Therefore normal retail traders like us find it difficult to make money trading?
Ans – I do not know, neither am interested to know who has inside information or not. All I know is that if you have a proper planning and correct method and knowledge to trade, no one can stop you to make money trading.
Q 8. Maximum how much I can invest if I want to trade in nifty options?
Ans – Maximum investment is your choice but to trade my strategies at least 75k is required.
Q 9. Can I trade anywhere or only in Nifty Options using your strategies? Because I want to trade Bank Nifty Weekly Options and Stock Options too?
Ans – You see the logic of the trade is important. Once you learn the correct method to trade you can trade anywhere whether it is Bank Nifty Weekly Options, Bank Nifty Monthly Options, or Stock Options.
Conservative Hedged Options and Futures Course – Who Can Do This Course?
You can do the course if you just know the Basics of Options and Futures , like what margin is blocked when we buy an option and how much is blocked when we sell an option. What is difference between buying and selling options, and what is Futures trading. This info is enough to do the course. No high technical knowledge required to do the course. Strike selection, when to enter and exit, all is well written in very easy to understand language in the course. Even if you do not know, just me after enrolling for the course and I will send you two great basic options links for more knowledge and better trading.
If you do not know Basics of Options do not worry I will help you know basics of options for free. To get the basics of options please fill the form below I am willing to help you for free:
Subscribe to My FREE Newsletter to Get 5 Day Free Course on Option and a Basic Option Course for FREE:
Testimonial by Aditi A Housewife – Results may vary for users.
WhatsApp Testimonial by Menon – Results may vary for users.
Find 100+ testimonials in these pages:
One Time Fees For The Conservative Options & Futures Course & Support on for Six Months is Rs. 5000/- Only.
Once you enroll for the course you will get all the 5 strategies and a bonus strategy of 38% a month made by one of my client in your within 24 hours of your payment. Your results may differ. You will get my personal support on only till you are successful trading my strategies. You will get support to understand the strategies for SIX (6) months. You will get IMPORTANT s with ideas to trade my strategies and other ideas on trading till you are successful trading my strategies. I will continue support up to 6 months from the date of enrollment. With the help of my support s you will get many ideas to trade on Nifty as well as on stocks. These s DO NOT go to free subscribers. One time fees only for course and support for 6 months is FREE. You Do Not Have to pay anything more.
One Time Fees For The Conservative Options & Futures Course & Support on Phone, WhatsApp and for Six Months is Rs.6000/- Only.
Once you enroll for the course you will get all the 5 strategies and a bonus strategy of 38% a month made by one of my client in your within 24 hours of your payment. Your results may differ. You will get my personal support on Phone + WhatsApp + till you are successful trading my strategies. You will get support to understand the strategies for SIX (6) months. You will get IMPORTANT s with ideas to trade my strategies and other ideas on trading till you are successful trading my strategies. I will continue support up to 6 months from the date of enrollment. With the help of my support s you will get many ideas to trade on Nifty as well as on stocks. These s DO NOT go to free subscribers. One time fees only for course and support for 6 months is FREE. You Do Not Have to pay anything more.
What You Get In the Course?
Before reading please understand that for all 5 strategies, strike selection will be taught. Strike selection while trading Options is the most essential part to succeed.
You get 5 option strategies: 2 conservative non-directional, 1 conservative stock option and 2 aggressive directional trades – and support from me to help you understand and trade the strategies well. I can give support because I believe in my strategies. The course has trades for all type of traders: non-directional are for people who are in a job or busy, stock option is for people who love to trade stocks and directional is for aggressive traders. Please read full to understand what you get and the risks and rewards involved in the strategies. ALL strategies have limited losses as they are 100% hedged and probability of success is more.
Stock Option Trade that is done once a month. It either makes a profit or hits stop loss on expiry day. If there is a profit there is nothing to be done. If there is a loss you will learn how to recover that loss and get into profits again. You also learn triple leverage i. e. money making money from three places.
Directional Conservative Trade is a combination of Future and options. Basically its a game of Delta. When right in Future, of course you make money. When wrong the Delta of options increases more than the Future – so you make money. It means you make money whether you are right or wrong. For example one of my clients made 37.8% return in April 2015 in the directional strategy. Please understand that results may vary for users.
You will learn how hedge options – so losses if any will be small and limited. If one option loses money, some other makes money. Overtime the non-directional trades win 80% of the times. So you should be in good profit at the end of the year. I also request you to Call/WhatsApp me: 9051143004 or me to know more. Everyone’s situation is different. I can understand your situation only if you contact me.
WhatsApp Testimonial by Manish – Results may vary for users.
Why Should You Do This Course From Me?
Good question. When there are thousands out there selling their strategies why should you buy this course from me? I can understand your concern. I am myself a trader. I lost huge money trading – almost 7 lakhs at a time when I was going through financial difficulties. And to rub salt in the wound, I also lost my job. Once things got settled, I devoted my time on reading options. That made me a conservative trader. My profits are small, but at least I am making profits. Then to share my knowledge and to help traders make money, I opened this website. I am sure you must have read a few strategies written by me. If I can write such good strategies for free, there must be something better in my paid strategies. I offer support for a few months from the date of order for free because I want you to make money trading. I charge a small fee to share some of the best conservative and aggressive strategies and to offer you support. One more thing, my 15,000+ newsletter subscribers trust me and I cannot afford to break their trust.
Testimonial by Sankar – Results may vary for users.
Note: I trade these strategies in a very different way than what is mostly found online or traders do. Proper entry and exit rules are defined and its done in a very disciplined way. That is why traders are making money. You can find 100+ testimonials in these pages:
Links to All Course Testimonials Pages:
Testimonial by Deepak – Results may vary for users.
Course also includes my support for months, it includes , Phone and WhatsApp support. I offer support to make sure you understand my strategies well, hedging Options and Futures well, remove Greed and Fear (the biggest enemies of a trader) from your body and mind while trading and learn to live A Peaceful Life with Consistent Profits. Instant online payment is possible. For more information click here.
How Much Money Do You Need To Trade These Strategies?
To trade the non-directional strategies you will need only Rs. 75,000/- in your trading account. For the directional strategies you will need only Rs. 60,000/- in your trading account.
If you have more cash you can trade the conservative stock option. You will learn triple leverage – which means money making money from three places.
You can start trading from any day, it has nothing to do with expiry. Technical Analysis knowledge is NOT required.
To know how this course can help you its best to Call/WhatsApp me: 9051143004. Feel comfortable and call, I am not one of those professional guys. 🙂
How It Works?
2. You SMS/WhatsApp/ me your name, , city, fee paid and bank name.
3. The same day I send you the course materials in your .
4. You read the strategies at home and take support from me to understand them.
5. You start paper trading.
6. After about a month you start real trading.
This is What Traders Who Have Taken My Course Has to Say:
Testimonial by Manohar – Results may vary for users.
Testimonial by Karthik – Results may vary for users.
Testimonial by Shiv – Results may vary for users.
Testimonial by Chandrashekar – Results may vary for users.
Please note that this was typical and it is not possible to get such a big return in every trade. Results can vary from trade to trade.
Testimonial by Saravanan – Results may vary for users.
Testimonial by Cheliyan – Results may vary for users.
Testimonial by Allen – Results may vary for users.
Testimonial by Ashok – Results may vary for users.
You can make profits in some trades even after hitting stop loss like this one:
Testimonial by Shiv – Results may vary for users.
Testimonial by Vipul – Results may vary for users.
Testimonial by Himanshu – Results may vary for users.
I get a lot of Thank You calls and s too. If they can make money why can’t you?
Disclaimer: Results may vary for users. Some make more some less but the idea is to learn, get education and trade.
Your Benefits:
Trade with Peace of Mind : You can trade without worrying about the stock markets. In fact when you will put on a trade I will ask you not to look at Nifty for the next one week. After that monitoring the trade once per day is required. Take time out for your life. Make Money Almost Every Month* : My goal will be to help you first reach a stage where you do not lose any money trading. Once that is reached you will start making small profits every month and then you can trade the directional trades that can bring very good returns. But this should be done when you are experienced trading my strategies. No Need to Predict the Direction of the Markets: These are all non-directional trades which means you need not predict the direction of the markets. One-half of your money will be guaranteed profitable. The other half also will be most of the times profitable, else we manage the trade. No Technical Analysis Required: You do not need to know Technical Analysis. These things are for traders who do intraday trades or do heavy leverage on futures or stocks. For options risk management is more important than Technical Analysis. I do not know Technical analysis either but still trade profitably. Simple Trades Based on Logic: When you talk to me you will understand that there is a logic behind these trades and not Technical. And the logic is very simple to understand. Positional Trades 10-30 Days: We take a position for around 10 to 30 days to get a good profit. Which means everyday trading is not required. 100% Hedged: If by chance there is a loss in the trade, the other position will make a profit. You can sleep better at night because the losses are limited. Limited Profits or Limited Losses: Profits are limited, but come almost in every trade. Only a few trades (approx 2 in 10) will show losses – but we will manage it and make sure the losses are small and few. Trade Only 2-4 Times a Month: Its obvious that if you trade less, there is no need to trade more that 2-4 times in a month. You can peacefully carry on with your job. No Need to Monitor the Trades Every Second: Since it takes some time before the profits starts rolling in, there is no need to monitor the trades every second. Just once a day is enough. When its time to take profits we just close the positions. Course on : This is convenient for both you and me. You can take the course right there in your home whenever you are free. Phone/Skype consultation is also possible.
This course is good if you have a regular job or business and cannot monitor your trades every second. All are positional and 100% hedged trades. There is NO chance of a huge loss whatever happens.
For more information contact me or Call/WhatsApp me on 9051143004. I can speak English & Hindi.
Once you start trading these strategies you will learn to manage risk. Managing risk is the most important trading decision. You will learn to totally control greed and be a disciplined trader. Within few months you will get confident in options trading.
IMP: The course is based on logic not on magic. Once you take the course and understand the logic behind the trades you will understand why it makes money almost every time its played. This should work even years after you have taken the course. You only invest a small amount to get knowledge to trade profitably for life.
What is the course fees?
You get 5 great conservative strategies and a bonus trade where one of my clients made 37.8% return in one month. (Your results may vary). You can do the course by paying a onetime fee only of Rs.6000/-. No more charges. No hidden charges. The fees includes the Course Modules + Support on + Phone + WhatsApp for months. I offer support till you are successful trading the strategies on your own and do not need my help. I will send the strategies to your in PDF documents within 24 hours of your payment.
One Time Fees For The Conservative Options & Futures Course & Support on for Six Months is Rs. 5000/- Only.
Once you enroll for the course you will get all the 5 strategies and a bonus strategy of 38% a month made by one of my client in your within 24 hours of your payment. Your results may differ. You will get my personal support on only till you are successful trading my strategies. You will get support to understand the strategies for SIX (6) months. You will get IMPORTANT s with ideas to trade my strategies and other ideas on trading till you are successful trading my strategies. I will continue support up to 6 months from the date of enrollment. With the help of my support s you will get many ideas to trade on Nifty as well as on stocks. These s DO NOT go to free subscribers. One time fees only for course and support for 6 months is FREE. You Do Not Have to pay anything more.
One Time Fees For The Conservative Options & Futures Course & Support on Phone, WhatsApp and for Six Months is Rs.6000/- Only.
Once you enroll for the course you will get all the 5 strategies and a bonus strategy of 38% a month made by one of my client in your within 24 hours of your payment. Your results may differ. You will get my personal support on Phone + WhatsApp + till you are successful trading my strategies. You will get support to understand the strategies for SIX (6) months. You will get IMPORTANT s with ideas to trade my strategies and other ideas on trading till you are successful trading my strategies. I will continue support up to 6 months from the date of enrollment. With the help of my support s you will get many ideas to trade on Nifty as well as on stocks. These s DO NOT go to free subscribers. One time fees only for course and support for 6 months is FREE. You Do Not Have to pay anything more.
Frequently Asked Questions:
Ans – Yes and No. Not because I cannot offer you a refund, but because I will offer you something that has value. And value has a price. Gaining knowledge has its own price. The money you pay is nothing compared to the knowledge you will gain from the course and what you will make from these trades in your life. Sorry by not giving a refund I am able to eliminate those not-serious traders. I don’t want people trading for fun to pay me, waste my time and their too and ask for a refund.
However, I only want very serious traders to do my course. I will be happy to talk and give a great service to traders who are serious about their money and trades. That said I will offer you a refund if you give me real reason why you want a refund. This will help me to improve my service. However you can ask for a refund within 7 days of paying for the course. Once refund is processed my service to you will stop immediately.
Q2. If I am unable to understand can I call you?
Ans – Yes, if you do not understand something and want to call please do so. Remember this is a paid service so please get the best out of me when we are talking. Ask questions and clear your doubts. Please call only if you have taken the phone support. Otherwise me for support.
Q3. I am not a technical person. I do not know technical analysis.
Ans – I am not a technical analysis expert either. The beauty of my strategies is that no technical or fundamental analysis knowledge is required. If you know basics of options that is enough. Trades and not that complicated. Simple strategies make more than complicated ones.
Q4. I am in a full time job will I be able to trade using the strategies you provide?
Ans – Yes because all are 100% hedged and positional trades. You will get enough time to take out profits or take a SL. Once you take the course you will know when to get ready to take out profits. Average time of a trade to hit profit is 10-15 days. You only need to see the values of the trade once in morning at around 10 am and once at around 2 pm and if everything is fine, you can continue with your job.
Q5. I do not live in India nor have an Indian bank account, but I want to get this course. Can I avail your service?
Ans – Yes. If you can trade online it does not matter where you live. You just need to know the strategies that I want you to learn. You can trade them in any stock market. All markets in the world behave the same. If you love trading options it does not matter whether you trade in India’s index/stocks or any other country’s. What matters is how much knowledge you have about options and your willingness to learn conservative trades.
Options trading rules are the same in any market in any part of the world. So even if you are trading RUT (Russell 2000), or NDX (NASDAQ-100) or SPX (S&P 500 Index) you can trade these strategies. In fact my guru traded RUT. Yes I learned these strategies from a trader in the US. He was a market maker in COBE (Chicago Board Options Exchange). Now retired, he used to manage millions of dollars in trading account using the same strategies since 1980s.
Q6. I am not a rich man. I have little money in my Demat account.
Ans – It does not matter. If you have just Rs. 75,000 in your account you can trade these strategies. Though, because the account size is small you will have to trade less lots. Once you gain confidence and experience, you should invest more money in your trading account to make more.
Q7. I have a lot of money in my trading account. Can I invest crores in your strategies?
Ans – The best way to start learning any new strategy is to start with 1 lot only even if you are a crorepati. Remember whether its one lot or hundreds or lots, your first job is to understand the logic behind the strategies, know why they make money and if they lose then whats your max loss, etc. Once the logic is clear you can start increasing the lot size. If you increase the lot size slowly, even if a stop loss is hit, a 1.5% loss will not damage your portfolio. Of course you know this a part of trading and you will recover your money. Within a few months you should be able to trade with a huge account. By that time you will also get good experience of trading these conservative strategies and you will not fear trading hundreds of lots.
Yes I want to generate wealth and am interested in your service. I want to learn directional and non-directional conservative option strategies for monthly income. Let me know how to pay.
P. S: Just to repeat these are the strategies you get when you take the course:
2 non-directional option strategies (1 purely non-directional, 1 almost always results in profits but needs to be played only if the first hits a stop loss), 1 stock option no loss strategy (slightly advanced strategy but works great) explained in details, & 2 conservative directional strategies – beautiful combination of Futures & Options – returns are better than the non-directional strategies – risk is less than the reward, on 10 you make 7, but you lose only 3 – direction needs to be predicted over a long period of time. If the stock goes against your view pretty fast, even 2% you still make some money. 🙂 Because the position is properly hedged you may take a 60 day time for your Future to hit target – mostly it does.
I am highly committed to my customers. I help them as much as possible. I always pick up the phone and reply s as soon as possible. I do not have any employees but still give better service than big companies. This is the reason I charge Rs. 1000 extra for the phone service, as it takes my time. The course is good, but you must be willing to learn. I am here to help.
Thank You for showing interest in Learning Conservative Option Trading Strategies. Conservative Trading is not a get rich quick scheme. It is a process that can earn you consistent returns in the long run. I can help you learn conservative option trading where profits will be more, losses less and you can grow your trading account with time.
One Time Fees For The Conservative Options & Futures Course & Support on for Six Months is Rs. 5000/- Only.
Once you enroll for the course you will get all the 5 strategies and a bonus strategy of 38% a month made by one of my client in your within 24 hours of your payment. Your results may differ. You will get my personal support on only till you are successful trading my strategies. You will get support to understand the strategies for SIX (6) months. You will get IMPORTANT s with ideas to trade my strategies and other ideas on trading till you are successful trading my strategies. I will continue support up to 6 months from the date of enrollment. With the help of my support s you will get many ideas to trade on Nifty as well as on stocks. These s DO NOT go to free subscribers. One time fees only for course and support for 6 months is FREE. You Do Not Have to pay anything more.
One Time Fees For The Conservative Options & Futures Course & Support on Phone, WhatsApp and for Six Months is Rs.6000/- Only.
Once you enroll for the course you will get all the 5 strategies and a bonus strategy of 38% a month made by one of my client in your within 24 hours of your payment. Your results may differ. You will get my personal support on Phone + WhatsApp + till you are successful trading my strategies. You will get support to understand the strategies for SIX (6) months. You will get IMPORTANT s with ideas to trade my strategies and other ideas on trading till you are successful trading my strategies. I will continue support up to 6 months from the date of enrollment. With the help of my support s you will get many ideas to trade on Nifty as well as on stocks. These s DO NOT go to free subscribers. One time fees only for course and support for 6 months is FREE. You Do Not Have to pay anything more.
If you want to ask anything about this course contact me or feel comfortable to Call/SMS/WhatsApp me on 9051143004.
*Please understand that individual results will vary and stock market investments are subject to market risk. You are advised to research thoroughly before investing in any stock, option, future or mutual fund. It is your money invest carefully. Information in this site and course is for educational purpose, knowledge on finance and stock market trading only. It is not a recommendation to buy or sell any Stock, Option or Future. I am NOT a financial advisor or tip provider. I DO NOT give any tips in any form and DO NOT have any intention to give tips in future as well. I only give Stock Market Education in General and Derivative Trading Education in particular through this website. I have been reading and researching a lot on stock markets, futures and options since I started trading in 2007. Please read About Me page to know more about me.
Contact me or Call me on 9051143004 for more information.
TheOptionCourse Copyright All Rights Reserved by Dilip Shaw, Founder of this website.
Copyright Infringement: Any act of copying, reproducing or distributing any content in the site or newsletters, whether wholly or in part, for any purpose without my permission is strictly prohibited and shall be deemed to be copyright infringement.
INCOME DISCLAIMER: Any references in this site of income made by the traders are given to me by them either through or WhatsApp as a Thank You message. However every trade depends on the trader and his level of risk taking capability, knowledge and experience. Moreover stock market investments and trading are subject to market risks. Therefore there is no guarantee that everyone will achieve the same or similar results. My aim is to make you a better & disciplined trader with the stock trading and investing education and strategies you get from this website. Please note that I DO NOT give tips or advisory services by SMS, , or WhatsApp or any other form of social media. I strictly adhere to laws of my country. I only offer education on finance, investments on stock markets in the best possible way as much as I can through this website. Still, you must consult an authorized advisor or do thorough research before investing in any stock or derivative before trading any strategy given in this website. I am not responsible for any investment decision you take after reading any article given in this website. Knowledge is the only way to get success in stock markets. I try my best to give stock market investing and trading knowledge through the articles posted in this website. Thanks for visiting my website.
Consevative Option & Future Course.
I am Dilip Shaw. I am a trader like you. I have been trading since 2007, but lost a lot of money till 2010. I then stopped trading and studied options like college exams. Started trading again from 2011 and never looked back since. I did a lot of research, read books and did countless paper-trading before being profitable. You can read about me here.
My conservative trading course since 2014 is helping many retail traders just like you who have a job or business make consistent profits like this: (Click here for more testimonials.) You can do this course from your home. Some traders make amazing profits like Rs. 16.26 lakhs profit in 5 days though results may differ for all.
This course helps you learn to trade conservative option strategies for monthly income. Once you finish the course you can start trading immediately. You can start trading from any day. No need to wait for expiry. You will make profits consistently.
This course is good if you have a regular job or business. You DO NOT NEED to monitor your trades every second.
Before reading please understand that for all 5 strategies, strike selection will be taught. Strike selection while trading Options is the most essential part to succeed.
You get two conservative non-directional strategies on options, one conservative stock option strategy and two conservative directional strategies on Future & Option combination.
Non directional trades are profitable 80% of the times and make 3-5% per trade (Results may vary).
Directional strategy makes money fast. It does not matter which side the stock moves. In fact you make more when you are wrong in the Future trade. 🙂 Some amazing profits possible here.
The stock option trade makes 30,000 in one trade and if SL is hit there is a way to recover losses plus make 30k in that trade.
Technical knowledge is NOT required. No need to monitor trades every second.
In the course you will learn how to select the strike prices. You learn when to trade, which strikes to sell which to buy, how much profit target you should be looking for, the best place to take stop loss and what to do after taking stop loss – means how to get that money back. The success rate is more than 80%.
Since trades are properly hedged there is no stress in trading my strategies .
I am very confident that you will make money trading my strategies. To help you succeed I offer few months support for FREE.
11 Reasons Why You Should Do The Course:
1. TA Knowledge NOT required.
3. Regular Monitoring NOT Required.
5. Do Course From Your Home.
11. FREE Support For Months.
To know more Call/SMS/WhatsApp me on 9051143004 or me now. I know English and Hindi.
You can find many testimonials in these pages:
P. S: So many years of trading has thought me one thing – it is always better to make small profits month after month, rather than lose money month after month trying to make too much money. It never happens. But small money accumulated month after month can become very big in only a few years.
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Options Basics: Understanding Maths Behind Options.
Most of the traders lose money by trading in options because they start trading in options without understanding basics of options. Options are not just about buying put and calls there are lot of things that works behind option pricing. You need to understand those crucial things for success in options trading. Here I am discussion some mathematical factors that decides option pricing.
Intrinsic and Extrinsic option value.
In the money(ITM) options have intrinsic value. If Nifty is currently trading at 6440 then 6400 ITM call option has intrinsic value of 40 . The 6400 put option has 0 intrinsic value ( technically it should be negative but we take what we get which is 0 )
If Nifty is at 6440 then 6500 call option will have intrinsic value zero and 6500 put option will have intrinsic value 60.
Hope you understood what is intrinsic value. It is simply the difference between current stock or index price and the strike price of the option. So ITM options has positive intrinsic value and OTM has zero intrinsic value.
OTM call have extrinsic value which is actually a non existent value. If Nifty is at 6400 then 6500 call option has 100 points of extrinsic value. It is non existent value because its just the value of hope, anyone buying 6500 call option when Nifty is at 6400 is only buying on hope that Nifty can cross 6500.
Some important parameters that effects option value.
1. Theta θ : which is time decay.
2. Delta Δ : the amount by which the option price changes for a change in the underlying.
3. Gamma Γ : the rate of change of delta to the underlying.
4. Vega ν : change in price of option with change in volatility (uncertainty / fear factor)
5. Rho Ρ : change in price of option to changes in Rate of interest or the cost of money ( not a big factor for us)
Theta θ Time Decay.
The premium of options keep on decreasing as we move towards the expiry, this decrease with time is called as time decay and is also known as premium decay. The greater the certainty about an option’s expiry value, the lower the time value. Conversely, the greater the uncertainty about an option’s expiry value, the greater the time value. Time decay is more in OTM options than ITM options .
There is no exact formula to calculate time decay or theta value it is calculated theoretically. A rule-of-thumb is that 1/3rd of the premium will decay in 1/2 the time left for expiry . Based on this theory we can calculate time decay.
Assume Nifty currently trading at 6470 and 6400 strike price call option is at 133. The intrinsic value is 70 here so actual premium is 133- 70 = 63.
If there are 20 days left for expiry, then in the next 10 days premium would decay by 1/3 of 63 = 21.
After 10 days 6400 call option would have a value of intrinsic value(70) +( 63-21 ) = 122 , assuming nifty remains at same 6470 level.
OTM call has no intrinsic value , the premium value is everything. If Nifty 6500 call option is at 90 then its value will decay to.
90-(1/3)*90 = 60 , assuming nifty remain at same level.
Delta Δ : the amount by which the option price changes for a change in the underlying asset.
Delta measures the sensitivity of of an option’s price to a change in the price of the underlying stock. Deltas value ranges from 0 to 1.00 call options have positive delta value while put options’ deltas are negative . If Nifty moves up by 100 points and if the delta value is 0.5 then ITM call option will increase by 50% or 50 points while ITM put option will decrease by 50% or 50 points. Many broker’s offer trading software that provides delta value. The exact delta value is calculated by options pricing model such as the Black-Scholes Model. The typical values for delta are given below you can use them they also works fine.
1. At The Money options have options delta value of 0.5.
2. Nearest In The Money Options have options delta value of close to 0.75.
3. Next Deeper In The Money Options have options delta value of close to 0.9.
4. Deep In The Money Options have options delta value of close to 1.
5. Nearest Out Of The Money Options have options delta value of close to 0.25.
6. Next further out of the money options have options delta value of close to 0.1.
7. Far Out Of The Money Options have options delta value of close to 0.
Gamma Γ : the rate of change of delta to the underlying.
You can observe that delta for ATM option is 0.5 and as it gets more ITM it moves towards 1 and as it gets more OTM it moves towards 0.
Vega ν : change in price of option with change in volatility (uncertainty / fear factor)
Volatility measures the amount of uncertainty. As implied volatility (IV) increases or decreases option prices increases or decreases even when there is no significant move in the stock or index. The effect of IV can generally be seen during infosys results when both put and call options price increases simultaneously as there is very high uncertainty on whether the result will be good or bad. Both the put and call options value decreases simultaneously after the results are out because uncertainty is gone. This special effect of IV is also visible during various events like budget, election results etc. If IV is high movement in option price will be more and movement will be less if IV is low.
I am not going to discuss how to calculate IV as NSE display it for every derivative equity. You can find the IV column that displays the vega factor of options chain at NSE website.
Rho – change due to Rate of Interest changes.
This is the cost of money factor as you are blocking money to hold an option. For all practical purposes, rate of interest does not change in the short term and can be ignored for trading purposes.
Hope this clears the mathematical terms that works behind option pricing. In the coming posts I will discuss some more detailed aspects of options.
Testimonials.
Nishhchhal Sreevastav, Bhopal.
Nishhchhal Sreevastav, Bhopal.
I am very fortunate to find a GURU like you. keep showering ur wisdom on all of us :)
RamaKrishna Jonnalagadda, Bangalore.
RamaKrishna Jonnalagadda, Bangalore.
I'm able to analyze my portfolio and screen it now with the help of this course. Course content and material very understandable and very useful. I can't tell 100% but I'm able to pick and analyze some good stocks after this classes I got a very good confidence level after this and I will try to invest more Learnt some very important points to dos and not to in bear and bull market.
Naveen Thakur , Mujaffarnagar UP.
Naveen Thakur , Mujaffarnagar UP.
Shweta Kapoor, Jaipur Rajesthan.
Shweta Kapoor, Jaipur Rajesthan.
Sathyamurthie Dhanushkodi, Coimbatore Tamilnadu.
Sathyamurthie Dhanushkodi, Coimbatore Tamilnadu.
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Difference Between a Discount Broker and a Full Service Broker.
There are hundreds of brokers in India offering different kinds of broking and other financial services. There are two categories.

How to trade nifty options basics

A n index future is a derivative, similar to a stock future, whose value is dependent on the value of the underlying, in this case, the index like the S&P CNX Nifty or BSE Sensex.
By trading in index futures, an investor is buying and selling the basket of stocks comprising the index, in their respective weights.
Stock index futures are traded in terms of number of contracts. Each contract would be to either buy or sell a fixed value of the index. The value of the contract would be the lot size multiplied by the index value.
About Nifty futures.
Nifty futures are index futures where the underlying is the S&P CNX Nifty index. In India, index futures trading commenced in 2000 on the National Stock Exchange (NSE).
For Nifty futures contracts, the permitted lot size is 50, and in multiples of 50. Like other futures contracts, Nifty futures contracts also have a three-month trading cycle -- the near-month, the next month and the far-month.
After the expiry of the near-month contract, a new contract of a three-month duration would be introduced on the next trading day. Investors can trade in Nifty futures by having a margin amount in their account. This margin is a percentage of the contract value. It is usually about 10-12 per cent.
Click NEXT to read why you should go for them. . .
W hy should you go for them?
Hedging. In simple terms, hedging is a strategy that helps limit losses. Exposure to a stock is equivalent to exposure to an index. This is because most stocks move in tandem to the market. Exposure to index futures helps hedge this risk.
Speculative gains. If you are certain about future market movements, you can make profits through index futures. If you bullish on the market, buy index futures. If bearish, you should sell index futures.
How do they work? You enter into a Nifty futures contract at a specified index value. On the expiry of the contract, the investor's profits would be the difference between the level of the index on expiry and the level specified in the futures contract at the time of purchase.
Short stock, long index futures. There are times when you sell the stock, but there is an upside in the market, thus resulting in lost potential profits. Index futures help you mitigate this risk. By buying index futures when you are short on the stock, you can minimise the amount of potential profits lost.
Equity portfolio, short index futures. There are times when you own a portfolio and are uncomfortable about market conditions. You can hedge this risk by selling index futures. The concept vests on the fact that every portfolio has index exposure and risks are accounted for by fluctuations in the index.
Click NEXT for winning strategies with examples. . .
Long Stock, Short Index Futures.
S uppose you are long 500 shares of Reliance Industries at the price of Rs 1,000 per share; spot Nifty is at 5,000; and Nifty futures is at 5,020.
To protect your Rs 5 lakh (Rs 500,000) position from a market downturn, you need to sell 100 Nifty futures. Suppose on the expiry date, the spot/futures Nifty is at 4,750 (5 per cent fall). On closing, both the positions, you would earn Rs 2,000.
Your position in Reliance Industries would have dropped by Rs 25,000 and the short Nifty would have gained Rs 27,000 [i. e., 100 x (5,020-4,750)]
Short Stock, Long Index Futures.
Suppose you are short 400 shares of Infosys Technologies at the price of Rs 2,500 per share; spot Nifty is at 5,000; and Nifty futures is at 5,050.
To protect your Rs 10 lakh (Rs 1 million) position from a market upside, you need to buy 200 Nifty futures. If, on expiry, the spot/futures Nifty is at 5,250 (5 per cent rise), on closing both positions, you lose nothing.
Your position in Infosys would result in a loss Rs 50,000 and the short Nifty would have gained Rs 50,000 [i. e., 200x(5,250-5000)]
Hedging Portfolio Risk.
Suppose the spot Nifty is at 5,000 and the three-month Nifty futures at 5,015. To protect a portfolio of Rs 5 lakh (Rs 500,000) from a drop in the market, you need to sell 100 December Nifty futures.