Hedging

Learn how to hedge your portfolio in India using options and futures. Covers hedge ratios, cost of hedging, and strategies to protect gains without selling your stocks.

What is Hedging in the Stock Market? Hedging in the stock market means opening an offsetting position so that a loss on your main investment is partly covered by a gai… 6 min read
Hedge Fund vs Hedged Portfolio — Are They the Same? A hedge fund is an exclusive investment vehicle for wealthy investors that uses complex strategies to seek high returns. In contra… 5 min read
Hedging Does Not Eliminate All Risk — Here's Why Hedging in the stock market is a strategy to reduce potential losses, not eliminate them entirely. It works by taking an offsettin… 5 min read
When Does Options Hedging Become Too Expensive to Justify? Options hedging becomes too expensive when the cost of premiums, time decay, and high implied volatility outweigh the actual risk … 5 min read
How to Build a Zero-Cost Collar for Portfolio Protection A zero-cost collar is an options strategy designed to protect a stock portfolio from large drops without upfront cost. It involves… 5 min read
How to Hedge Your Portfolio Before Budget Day Using Options To hedge a portfolio before Budget Day, size a Nifty put or put spread to cover 50 to 80 percent of your equity exposure, enter 2 … 6 min read
Options Hedging for Salaried Investors Holding ESOPs Hedging in the stock market is like buying insurance for your investments. For salaried employees with ESOPs, it involves using fi… 5 min read
How to Roll a Futures Hedge Forward to the Next Monthly Expiry Rolling a futures hedge forward means extending your protection by closing your current futures contract and opening a new one wit… 5 min read
Futures Hedging vs Options Hedging — Which Is Better for Indian Investors? Futures hedging and options hedging both protect investments from market drops. Futures hedging might be cheaper and more precise … 5 min read
My Short Futures Hedge Is Losing Money Even Though Markets Fell — Why? A short futures hedge can lose money even when markets fall because of something called basis risk. This occurs when the futures p… 5 min read
I Set Up a Futures Hedge and Now I Have a Margin Call — What Happened? A futures hedge can trigger a margin call because of daily mark-to-market (MTM) losses. Even if your overall portfolio position is… 5 min read
How to Hedge a ₹1 Crore Portfolio With NIFTY and Bank NIFTY Futures Hedging a ₹1 Crore portfolio involves calculating the number of index futures contracts needed to offset potential losses. You det… 6 min read
What Happens to Your Futures Hedge During a Market Circuit Breaker? During a market circuit breaker, your futures hedge remains in place but becomes illiquid, meaning you cannot close or adjust it. … 5 min read
Why Your NIFTY Futures Hedge Never Perfectly Offsets Your Losses A NIFTY futures hedge rarely offsets portfolio losses perfectly because of beta mismatch, basis risk, coarse lot sizes and rollove… 5 min read
How Correlation Between Your Hedge and Portfolio Affects Hedge Quality A hedge only works when its price reliably moves opposite to your portfolio. Correlation measures that relationship, decides hedge… 5 min read
Is a Zero-Cost Collar Actually Free? Understanding Hidden Trade-Offs A zero-cost collar is not truly free, as it involves significant non-cash trade-offs. While you may not pay an upfront premium, yo… 5 min read
How to Protect Your Portfolio Before a Market Crash With Hedging Hedging in the stock market is a strategy used to reduce the risk of loss in your investments. You can protect your portfolio by u… 5 min read
How to Hedge a ₹1 Crore Portfolio — A Complete Step-by-Step Plan Hedging in the stock market is like buying insurance for your investments to protect against losses. To hedge a 1 crore rupees por… 5 min read