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

More from Swapnil Kommawar

How I trade monthly short strangles for regular income

A thread 🧵🧵

Retweet 🔃🔃 for max reach

👉Short strangle means,
Selling OTM call option and Selling OTM put option

Here is a detailed thread on short strangle


👉Generally, this strategy gives good returns when market is sideways but most trader get wrong entries and wrong exist

👉Ahead of major event option price will increase because of uncertainty. We have to take advantage of that

👉As the VIX is the derivative of option price, we have to check this parameter first

When VIX is >20, it is the right opportunity to deploy short strangle

👉If we look at the weekly and monthly candles of nifty, it is easier to identify which strikes to choose

Entry conditions:

👉VIX >20
👉Choose the strikes which are 6% above and below of nifty in next month contracts
👉Combined premium should be in the range of 160-170
👉Next month contracts should be taken at the mid of current month

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महर्षि कश्यप की तेरह पत्नियां थीं।लेकिन विनता व कद्रु नामक अपनी दो पत्नियों से उन्हे विशेष लगाव था।एक दिन महर्षि आनन्दभाव में बैठे थे कि तभी वे दोनों उनके समीप आकर उनके पैर दबाने लगी।


प्रसन्न होकर महर्षि कश्यप बोले,"मुझे तुम दोनों से विशेष लगाव है, इसलिए यदि तुम्हारी कोई विशेष इच्छा हो तो मुझे बताओ। मैं उसे अवश्य पूरा करूंगा ।"

कद्रू बोली,"स्वामी! मेरी इच्छा है कि मैं हज़ार पुत्रों की मां बनूंगी।"
विनता बोली,"स्वामी! मुझे केवल एक पुत्र की मां बनना है जो इतना बलवान हो की कद्रू के हज़ार पुत्रों पर भारी पड़े।"
महर्षि बोले,"शीघ्र ही मैं यज्ञ करूंगा और यज्ञ के उपरांत तुम दोनो की इच्छाएं अवश्य पूर्ण होंगी"।


महर्षि ने यज्ञ किया,विनता व कद्रू को आशीर्वाद देकर तपस्या करने चले गए। कुछ काल पश्चात कद्रू ने हज़ार अंडों से काले सर्पों को जन्म दिया व विनता ने एक अंडे से तेजस्वी बालक को जन्म दिया जिसका नाम गरूड़ रखा।जैसे जैसे समय बीता गरुड़ बलवान होता गया और कद्रू के पुत्रों पर भारी पड़ने लगा


परिणामस्वरूप दिन प्रतिदिन कद्रू व विनता के सम्बंधों में कटुता बढ़ती गयी।एकदिन जब दोनो भ्रमण कर रहीं थी तब कद्रू ने दूर खड़े सफेद घोड़े को देख कर कहा,"बता सकती हो विनता!दूर खड़ा वो घोड़ा किस रंग का है?"
विनता बोली,"सफेद रंग का"।
तो कद्रू बोली,"शर्त लगाती हो? इसकी पूँछ तो काली है"।