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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It was Ved Vyas who edited the eighteen thousand shlokas of Bhagwat. This book destroys all your sins. It has twelve parts which are like kalpvraksh.

In the first skandh, the importance of Vedvyas


and characters of Pandavas are described by the dialogues between Suutji and Shaunakji. Then there is the story of Parikshit.
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It also discusses the evolution of universe.(
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Next is the portrayal of Vidur and his dialogue with Maitreyji. Then there is a mention of Creation of universe by Brahma and the preachings of Sankhya by Kapil Muni.


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॥ॐ॥
अस्य श्री गायत्री ध्यान श्लोक:
(gAyatri dhyAna shlOka)
• This shloka to meditate personified form of वेदमाता गायत्री was given by Bhagwaan Brahma to Sage yAgnavalkya (याज्ञवल्क्य).

• 14th shloka of गायत्री कवचम् which is taken from वशिष्ठ संहिता, goes as follows..


• मुक्ता-विद्रुम-हेम-नील धवलच्छायैर्मुखस्त्रीक्षणै:।
muktA vidruma hEma nIla dhavalachhAyaiH mukhaistrlkShaNaiH.

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yuktAmindukalA nibaddha makutAm tatvArtha varNAtmikam.

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gAyatrIm vardAbhayANkusha kashAm shubhram kapAlam gadAm.

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