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.