How to hedge your portfolio? | Safeguard using futures and options | CA Rachana Ranade

"so for example in this case shahrukh khan is long on reliance industries shares right so he has bought the shares so if he fears what he fears the downfall and to protect that what can he do possibility number one he can just short the futures okay shorting the futures means what he has sold the futures of reliant shares means what he's now betting on the downside on futures"

"if you're long in a specific stock what you can do simple you can short a call option right possibility one possibility number two you can buy the put of that same stock"

"if you believe that the fall in the share the temporary fall in the share might be fear example for taxi or jagger if you feel the speed of fall is going to be very fast in that case ideally you should hedge using a put option so ideally you should buy a put in that case"

"but if you feel that the fall over the next two three months four months whatever might happen but it might happen slowly steadily a little bit sideways again a little bit in a downward trend in that case you can go ahead by hedging your portfolio by selling a call option"

"which call option is to be chosen if you want it as a direct option like a future in that case you can do a call shorting of itm item is basically you go ahead within the money call option shorting right basically here the delta is taken care of and it will be as good as hedging via futures"