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.