Bearish Strategies

A Thread, read till the end to compare three

strategies, tried explaining in simple language🧵🧵👇

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If we want to trade in F&O, we have to create a view

If our view is bearish, then following strategies can be deployed.
1⃣ Buy Put

👉If our view is to bearish, we can simply buy ATM put and ride the downward momentum.

👉Risk would be limited to the premium we have paid
Reward would be unlimited, as long as it goes below (strike price- premium paid).
Example :

You bought 17200 put option at 135.9

Max loss is nifty lot size = 50 * premium paid

50*135.9 = 6795

In order to be in profit on expiry it should close below 17200 - 135.9 = 17064

Called as breakeven shown in chart👇
✅Bear Spreads

👉Spread strategies are used when our view is neutral to bearish

👉These strategy's are limited risk and limited reward strategies.
2⃣Bear Put Spread (Debit Spread)

👉We use only put to trade our bearish view

👉In this spread we buy a put option at ATM strike and sell a put option below that strike

👉Risk is limited to the premium which got debited
👉Reward would be limited when it goes below the sold strike.

Example : We bought 17200 put at 135.9

Now, we sell below strike 17050 at 75.85

In order to be in profit Nifty at expiry should be below 135.9 - 75.85 = 60.05

So, 17200 - 60.05 = Rounding off to 61 so 17139 👇
3⃣Bear Call Spread (Credit Spread)

👉We use only call option to trade our bearish view

👉In this spread we sell a call option at ATM strike of and buy a call option above that strike

👉Risk is limited and when it goes above sold call option strike price.
👉Reward is also limited as long as it trades below sold strike price.

Example : Sold 17200 at 109.6

And bought 17350 at 51.3

So, in order to be in profit it has to trade above
109.6 - 51.3 = 58.3

Now, breakeven is at 17200 + 58.3 = 17258 as shown in below chart👇
Here, you can compare the chart of 3 views which we shared above 👇
Goal is to educate and help small traders to trade with hedge, which will help to minimize their risk😀

Tried explained about bear spreads in simple language, please let me know if you have any doubts.
You can join my telegram channel through below link 👇

If not you can search with options trading with swapnil in telegram

https://t.co/yY38y9Eepi

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Rig Ved 1.36.7

To do a Namaskaar or bow before someone means that you are humble or without pride and ego. This means that we politely bow before you since you are better than me. Pranipaat(प्राणीपात) also means the same that we respect you without any vanity.

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Surrendering False pride is Namaskaar. Even in devotion or bhakti we say the same thing. We want to convey to Ishwar that we have nothing to offer but we leave all our pride and offer you ourselves without any pride in our body. You destroy all our evil karma.

2/9

We bow before you so that you assimilate us and make us that capable. Destruction of our evils and surrender is Namaskaar. Therefore we pray same thing before and after any big rituals.

3/9

तं घे॑मि॒त्था न॑म॒स्विन॒ उप॑ स्व॒राज॑मासते ।
होत्रा॑भिर॒ग्निं मनु॑षः॒ समिं॑धते तिति॒र्वांसो॒ अति॒ स्रिधः॑॥

Translation :

नमस्विनः - To bow.

स्वराजम् - Self illuminating.

तम् - His.

घ ईम् - Yours.

इत्था - This way.

उप - Upaasana.

आसते - To do.

स्त्रिधः - For enemies.

4/9

अति तितिर्वांसः - To defeat fast.

मनुषः - Yajman.

होत्राभिः - In seven numbers.

अग्निम् - Agnidev.

समिन्धते - Illuminated on all sides.

Explanation : Yajmans bow(do Namaskaar) before self illuminating Agnidev by making the offerings of Havi.

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