We will discuss here the benefits of hedging, how it helps to save our capital and generate the returns in long run.

Below snapshot is of trade taken on Silver dated 16-12-2021. Long Marubozu Candle was formed on that day along with good volume. Price was hovering around 62000 while the below trade was taken.

Technical Analysis


Silver Mini Futures Price Chart on www.tradingview.com
Price is back to the levels where entry was made.
Trade Analysis

Bought Silvermini Future Contract Price 61854, Qty. 5 (covered the position)
Sold nearest level Call option 62000 CE with same quantity.

Price did not make through resistance level of 63000 and by today its almost retraced back to the same level where the position was taken. Since we covered the position by hedging it, it didn’t hurt much and also giving Net Positive Return.

This is the beauty and power of hedging which retailers miss upon and its a skill that must be inculcated into Retailer’s trading arsenal.

Covered Call Trading Strategy on Silver

Date: 01/13/2022 Update on Silver Covered Call position both positions trading in Green

Position as on 01-17-2022

After almost a month both positions are yeilding almost the maximum returns, hence will close the position as only a week is left for the expiry. It is good to book profit if market is blessing us.

Total safe & passive 10% Returns on Capital as did not have to adjust the position in 3 months. It could have been easily adjusted to breakeven if there was any major fall.  

Position closed on 02-11-2022 

Silver Trading Hedging Strategy

By Pankaj

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