In the face of rising global uncertainties — including tariff wars, geopolitical tensions, and India-Pakistan issues — market volatility over the next three months seems inevitable.
To proactively manage this risk, I am implementing a hedging strategy using equity futures and options.
My goal is simple: protect the value of my portfolio and avoid any unexpected capital erosion.
Why Hedge Now?
Tariff wars could disrupt global supply chains and impact corporate earnings.
Geopolitical risks in South Asia could trigger sharp market corrections.
Global slowdown fears continue to weigh on investor sentiment.
Given these risks, a traditional “wait and watch” approach can leave portfolios vulnerable. Instead, a smart defensive strategy using derivatives can provide stability.
How Hedging Will Work:
I will sell index futures (e.g., NIFTY or SENSEX futures) against my equity holdings.
I may also buy protective puts to cap downside risk while keeping upside potential open.
If my portfolio declines in value, gains from futures/puts will offset the loss.
If markets rally, my portfolio gains will outweigh small hedge costs.
In effect, I am freezing my portfolio value, minimizing surprises during this uncertain period.