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.
21 articles- 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… 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… 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… 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… 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… 5 min read
- Options Hedging for HNI Investors With Portfolios Above ₹1 Crore Options hedging lets HNI investors with portfolios above 1 crore rupees soften drawdowns without selling long-term holdings. The… 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… 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… 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… 5 min read
- When to Use Cross Hedging With Futures — A Decision Guide Use cross hedging with futures only after a direct contract has been ruled out, the asset–futures correlation is at least 0.7… 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… 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… 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… 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… 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… 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… 5 min read
- Why Most Individual Indian Investors Don't Need to Hedge — And the Exceptions Most individual Indian investors do not need to hedge because their horizons are long, their positions are small, and the cost of… 5 min read