InvestorQ : My view is that the Nifty will go down. What exactly should be my strategy?
Nishant Chandani made post

My view is that the Nifty will go down. What exactly should be my strategy?

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Abhi Yadav answered.
3 years ago
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You can just buy a plain vanilla put option on the Nifty. Say, the Nifty is currently quoting at around the 9800 mark and you expect the Nifty to correct towards the 9200 mark. You can play this trend by buying the 9700 put option by paying a premium of, say Rs.70. That means your profit in the event of a fall in the Nifty will start from 9630 onwards. On the downside, your profits will be unlimited. This has two major implications. Firstly, you do not have to worry about exiting your equities and incurring capital gains liability but instead you can play the downside using put options. Secondly, the profit on the put options will ensure that you are sitting on liquidity when the markets get closer to the 9200 levels, enabling you to buy stocks at bargain prices.

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