Why hedging is important for options carrying overnight ?
On 23rd Feb shared 23000 March month end call buy.
And after the trade shared gave update if we don't get close at 22250 then sell 23500 ce against it and create a spread and today is 27th Feb still nifty Is lacking to give close at or above 22250 spot levels..
This where the closing guidance helps us to manage the position when we don't get our desired close which is high probability means there is chance of rangebound market or a corrective mkt and here we get opportunity to manage the risk based on closing guidance for carry options position overnight.
Just imagine those having naked options in hand would have to suffer pain for 3 continues trading session just in hope soon they get their rate or trade runs in their direction but those who used closing guidance view and manage position well and created hedge can sit on the trade without tension and hold the trade with stoploss for tgts given.
So moral is closing guidance helps to do proper risk management specially to index traders and also gives opportunity a timely opportunity to hedge the position for carrying overnight
On 23rd Feb shared 23000 March month end call buy.
And after the trade shared gave update if we don't get close at 22250 then sell 23500 ce against it and create a spread and today is 27th Feb still nifty Is lacking to give close at or above 22250 spot levels..
This where the closing guidance helps us to manage the position when we don't get our desired close which is high probability means there is chance of rangebound market or a corrective mkt and here we get opportunity to manage the risk based on closing guidance for carry options position overnight.
Just imagine those having naked options in hand would have to suffer pain for 3 continues trading session just in hope soon they get their rate or trade runs in their direction but those who used closing guidance view and manage position well and created hedge can sit on the trade without tension and hold the trade with stoploss for tgts given.
So moral is closing guidance helps to do proper risk management specially to index traders and also gives opportunity a timely opportunity to hedge the position for carrying overnight
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