Put option loss mitigation

F&O
1

Hey, I have sold a put option on the Nifty Fifty for this week at 25,950, which is equivalent to 65 shares.

The market has reached approximately 25,690.

I’m not sure what my losses will be, such as if the market closes on Tuesday at the spot level of 25,600. What would be my loss if this is the closing index level? And what could I be advised: should I exit the option now? Will I be able to mitigate the loss in any way? Or should I wait until Tuesday for the option to expire?

2

350 points(x65) will be your loss if NIFTY closes at 25600,i.e 25950-25600. You may buy a lower put option, to create a “bull put spread”, to limit your losses, in case NIFTY goes down.

If I were you, I’d close position when and if it rises a bit or sell at even more loss, if it goes some more. Sell on rise would be my strategy. In any case, have a predetermined SL placed at the broker app.

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