Peter June 10th, 2014 at 1:01am

Hi Kan,

One suggestion could be to sell the same amount of puts that you are long on a lower strike than what you have already bought. You will then be long a put spread (or bear put spread). The sold put will bring in some premium for you, however, your gains should the market fall, will now be capped at the difference between the two strikes less the net premium - rather than capped at the stock price going to zero.

This won't turn things around but will stem the bleeding a little and keep you in a position.

Alternatively, if you feel strongly about your view on the market and think it is still going to sell off, you could always roll your put to a strike closer to ATM. Or, reverse it go a long call ;-)

kan June 8th, 2014 at 8:55am

Hey:)
I trade in the Indian Market .. I have been buying puts in the expectation of the markets to fall but scene is completely different and the markets are just touching new highs.. is there any way i could hedge them and minimize my losses ??
thanks in advance :)

Anonymous April 7th, 2014 at 12:44am

Hi Peter Sir,
I use indian market for trading.I am new in option (Intra day) trading..Please tell me how to use the option trading calculator (Intra day trading) and how i get the information about "how much call/put it gives today?" means how much points market gives call or put.
If you have another strategy then please tell me..
Thank you,
Anu (India).

Peter March 27th, 2014 at 5:41am

Hi Anu,

Not sure what you mean by CE/PE - but you can either use my option spreadsheet or an online option calculator to simulate various option greek and pricing values.

I would also recommend paper trading for a while to get a feel for trading options before risking your real money. Log your trades and your reasons for taking them so you're comfortable before you jump in.

What markets are you going to trade - Indian, US etc?

Anu March 27th, 2014 at 2:12am

Hi peter Sir.
I am Indian. I started option trading now a days.I am very interested in trading.Is there any trick for what will happen today means what it give(CE/PE).
Also tell your own tricks for start up.

Thank you.

Peter September 2nd, 2013 at 6:17am

Great! Glad I could help!

Ratha September 1st, 2013 at 9:46pm

Hi, Peter

I would like to inform you that i can solve and calculate the option position related to matrix method.

Thank you so much for guiding me and tell the way to do it.

Best Wishes

Peter August 29th, 2013 at 11:51pm

Hi Ratha,

I see! Yes, you can download my option pricing spreadsheet, which has the option pricing code unlocked in the VBA editor. Alternatively, you can read the formula and how it is composed on the black scholes page.

Let me know if there's anything else that is unclear.

Ratha August 28th, 2013 at 1:28am

Hi Peter

Thanks, this is a result that i would like to know. But i still wonder how to calculate call price simulation as in the table of Online Option Calculator. Because i want to know clearly the formula. I have tried to find it for three days but can not solve it.

I hope you can help me. This is a first time which i have studied about the capital charge of equity option position. On the other hand, no one has taught me about how to calculate it, only on self studied via google search. Thus, I want you to guide me.

Best Wished

Peter August 28th, 2013 at 12:33am

Hi Ratha,

I see - you want to see a risk matrix displaying both price changes and volatility changes.

You can use the online option calculator for this. Enter the option parameters in the section on the left and hit calculate. Then scroll down to the bottom of the page where you'll see the simulation table.

Does this help?

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