Today the broader market has down due to the political crisis in Iran.As per astrology,the planetary positions on Nifty future is also favor to bears.In this situation most of the small investors will worry about their holdings in equity segment.They may also planning to buy additional shares to do price average.But is this "Averaging the price" is a good one? certainly not.Then how to protect your investments.Follow the technique given below.Click here to get FREE intraday trading tips in equity
If suppose you have invested in BHEL at Rs 250/- per share means when the price of BHEL comes down,do not buy additional shares in equity.Try some PUT options in BHEL to do price average in a different way.
When the spot price of BHEL started to comes down from Rs 250/- to Rs 240/- buy one lot of BHEL 240 PUT.When the price of the BHEL move towards to Rs 230/- level buy another one lot of BHEL 230 PUT.If suppose on the next day the spot price of BHEL starts to move from Rs 230/- and move towards to Rs 240/- buy one lot of BHEL 240 CALL option.Here I would like to tell you one point that if the bought option's premium is got increased,sell and wind up that particular position.By doing this you may earn some handsome profit.Use this profit money to buy some quantity of BHEL shares in equity.So when you sell and wind all positions in options (both calls and puts) use the profits earned to buy BHEL shares in equity.
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So the price averaging is to be done from the profit money from suitably hedged option position and price averaging should not be done by additional capital amount.
This is a smart way of managing holdings.Apply this techniques in all other holdings of yourself.
You may say that you do not know how to trade in options.If so it is better join our "Correspondence course in Option trading trix" you will learn many things in option trading.So be a little master in options and manage your holdings in equity.
The course fees for Option trading is Rs 5,555/-only.
Remit the course fees at any one of our bank a/c (given at right hand side of this page) and inform your payment details along with your short profile.All the best.
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