Right way to hedge the futures position?

Hello Everyone, I am fairly new on this forum.
I would like to know the proper way of hedging my futures position with options and the M2M settlement rules for my futures position as the hedged options don’t have the M2M settlement rule.
I mean to say that what if my hedged Put position is in profits and my futures position is in loss then What is the right way to get the best out of my options position to use against the M2M losses provided by the futures position?


You can book profit in put option by rolling over.

Okay, I get the book profits part and I have a part knowledge of Squaring off the current option position and instantly buying another option to hedge my futures again, but I am not very clear about that. Can you explain a bit?

Your booked profit will compensate your loss in future position. If it’s high loss then you have to take it.

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I am sorry to say but, there must be a better way to handle the position without taking the loss.
Anyway, Thankyou for your interest.

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FNO are primarily used for hedging.

you don’t hedge a position that is already used for hedging.

God save us all! Thanks for the interest by the way.
Trader DUDE. :joy:

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Just to save your time…you can hedge Futures with options, options with options and also large quantities of Stocks with futures and options both. Okay brother. All the best.

It can reduce your margin requirements and also contain your losses.

sure you can.

The intended use of FNO is used for hedging purposes.

you don’t hedge a hedging product.

if you try to use it for hedging you are going to have a bad time.

Good luck. Its your money.

Can you provide an example of a “Bad time” If I use options as a hedging tool for my futures position?
I would like to know how?

The very fact that you have to ask this question shows you are having a bad time.

Just look at your original question.

What exactly are you trying to do.

I do not have the time to teach you how FNOs work. That is something you have to do.

May be try doing some research.

Another clue - why is it you are the only one doing this? i.e hedging a hedging product.

I looked at my original question and it seemed fine.
To clear your perspective I hedged my Long futures position with a long put position in order to decrease my margin requirement and to cut my losses short because buying a naked futures position is not a very wise thing to do.
The answer to your clue… All the option sellers hedge their hedging products, ever heard of that?
I am not the only one buddy, this thing is universal. so Chill! If you know the right direction of an answer then only try to attempt answering.

you still don’t understand what was saying.

you did not hedge the position, you only took one long and and one short. That is a strategy be it options or futures. Tell me what exactly did you hedge? did you hedge the beta?

what you trying to do is not hedging.

I think you do not understand the concept of hedging.

Also you need to relax and chill dude. you are trying to hard.

I do know the right direction, that is why i tried to help you. but you seem confused , hence the original question.

I suggest you do more research , may be then you will start asking the right questions.

Also no need to reply to me if you don’t like my reply. you can simply ignore and move on.

?? Hedging Futures with Options is actually a common practice.

See.! It is a common practice dude, I have my research at the right place.

except its not hedging.

Its not hedging.

Its a strategy. A combination of FNO positions is a strategy NOT hedging.

it seems you know What I am talking about in my original question
Do you have any insight on that brother?

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I may help if you can tell me, your futures trading include only Index or only stocks or both ?