It’s probably the lousiest day to set up a short, after the index is nearly 3% down; but I’m getting the feeling it’s going down further. Worst case, I lose some virtual money.
So I’m buying Nifty puts for 4400, for August – which will expire next week, so it’s a short term trade. The puts were last traded at 139.05, and I will put 40% of hte net portfolio on it – that’s 20L. Since each contract (50 Nifty) is 2.2L in size, I’ll be buying 8 contracts – or 400 Nifty puts.
The cost is 55,000 and I expect to close this trade next week. Let’s see how it goes.
Disclosure: Short the Mini-Nifty today. Just to check something out.