NIFTY 50 – EXACT HEDGE TRADES (FUTURES + OPTIONS)
Context Date: 19 Dec 2025
Spot Zone: 25,950–26,000
Market Structure:
FII: Structural shorts, hedged via cash
DII: Strong delivery buying
Options: Large short covering, but overhead call supply remains
Bias: Range-bound with mild upside risk
TRADE SET 1: RANGE HEDGE (PRIMARY INSTITUTIONAL TRADE)
Objective
Capture time decay + range movement while protecting against short-covering breakout.
Structure
Futures + Call Spread Hedge
SELL NIFTY FUTURES @ 25,980 (or nearest)
BUY 26,100 CALL
SELL 26,300 CALL
Why this Works
Futures short aligns with FII structural bias
Call spread caps upside risk
26,100 is immediate resistance
26,300 is heavy call supply zone
Payoff Logic
Market stays below 26,100 → Futures + theta benefit
Breaks above 26,100 → Loss capped by call spread
Sharp rally → Hedge activates, no unlimited loss
Risk Management
Max Risk: Limited (difference of call strikes – premium)
Exit Futures Short: Sustained above 26,120
TRADE SET 2: BUY-ON-DIP WITH DOWNSIDE INSURANCE (DII STYLE)
Objective
Participate in dip buying while protecting against sudden FII sell-off.
Structure
Long Futures + Put Spread
BUY NIFTY FUTURES @ 25,800–25,850
BUY 25,750 PUT
SELL 25,600 PUT
Why this Works
25,750–25,800 = strong DII support
Put spread reduces hedge cost
Allows upside participation if bounce happens
Payoff Logic
Market rebounds → Futures profit
Market falls → Put spread limits loss
Volatility spike → Hedge gains value
Invalidation
Daily close below 25,600
TRADE SET 3: SHORT-COVERING BREAKOUT PLAY (EVENT-DRIVEN)
Use ONLY if
Sustained trade above 26,100
Option OI turns net positive
Futures shorts start covering intraday
Structure
Long Futures + Call Buy
BUY NIFTY FUTURES above 26,120
BUY 26,200 CALL
Why this Works
Above 26,100 → call writers under pressure
Gamma acceleration possible
Futures + call = convex payoff
Target Zone
26,250 – 26,300
Hard Stop
Futures close back below 26,050
TRADE SET 4: NON-DIRECTIONAL HEDGE (LOW CONVICTION DAYS)
Objective
Exploit range compression when direction is unclear.
Structure
Iron Fly (Professional Hedge)
SELL 26,000 CALL
SELL 26,000 PUT
BUY 26,300 CALL
BUY 25,700 PUT
Why this Works
26,000 = option magnet
Strong boundaries on both sides
Ideal when VIX cools and OI stabilises
Risk
Limited and predefined
Exit if spot moves beyond hedge strikes
TRADE SET 5: FII-STYLE CASH–FUTURE–OPTION HEDGE (ADVANCED)
Structure
BUY NIFTY ETF / CASH BASKET
SELL NIFTY FUTURES
SELL OTM PUT (25,700)
Logic
Cash long = accumulation
Futures short = hedge
Put sell = premium income + confidence in support
This mirrors current FII behaviour seen in data.
WHICH TRADE TO USE – QUICK GUIDE
Market Behaviour Trade Set
Range-bound Trade Set 1
Dip toward 25,800 Trade Set 2
Break above 26,100 Trade Set 3
Low volatility Trade Set 4
Positional hedge Trade Set 5
FINAL PROFESSIONAL NOTE
This market is NOT trending.
It is a hedge-dominated market, where:
Futures show bias
Options control direction
Cash provides stability
Unhedged positions are structurally risky.
The above trades are exactly how institutions survive such phases.
Anish Jagdish Kumar
Indirect tax india online research
Disclaimer
This research is for educational and analytical purposes only. It does not constitute investment advice. Market participants should assess risk independently before taking positions.
