When Then Market Took A Tumble

This has been the most awaited moment for some!!

No joke... The current market crash has been in the pipe line for many.
This cud have been guaged from the depth of the market. Of the 30 share index only the couple of scrips participated in the rally. The Tech stock and the banking scrip had a big say in the sensex reaching the high of 14000. S o it was a spiral from there a typical what goes up shd come down.

So those who had bought a PUT option at 3900 levels would be making a handsome profit ....

This brings us to the question as to whether Derivatives can be really used to proper effect.
The loss suffered on the market can be partly offset but buying PUT options.But at 14000 levels most wud have thought 14500 ... so the option bought will be worthless by Dec 28 !! But with the current turnaround those with contrarian views had the last laugh.

Those of who have taken the cheques to up the Margin money do need to reconsider to use the Derivatives with care as one needs to check if they are able to tacle the potential loss . Most see the Profit aspect and not the equally weighted loss aspect.

Taking a balanced postion wil help to cut the loss. But highly leveraged position call lead to huge profit and equally huge loss. So for those who want to make a quick buck @ Derivative this market wud have been a lesson.