How to hedge your MTF position using stock options - Put Options
We hedge our STOCKS by buying PUT OPTION
Suppose I buy M&M stock
CMP - 3561.3
Lot size - 200
Suppose I cant take loss if the stocks falls below 3400
So I buy 1Lot of 3400PE
So now I have unlimited UPSIDE potential
Limited DOWNSIDE
Here 25.7 * 200 = 5140 is the cost I pay to hedge my stock
When stocks starts falling below 3374.3 the hedge would protect me
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