Hedging - Option Buying Or Option Selling?

Option selling

For hedging, You always buy a option and gives the premium (cost of option).

You buy PUT option when you suspect that the market will fall –
PUT – It grants the right to the owner to sell an underlying asset at a fixed price (strike rate) through a predetermined time frame

vis-a-versa for call.

OPTION seller are those who taking the gurantee to the movement of stocks. Selling do not hedge the stocks as far as i know.
@bikidas2060

InvestPotato wrote:

For hedging, You always buy a option and gives the premium (cost of option).

You buy PUT option when you suspect that the market will fall –
PUT – It grants the right to the owner to sell an underlying asset at a fixed price (strike rate) through a predetermined time frame

vis-a-versa for call.

OPTION seller are those who taking the gurantee to the movement of stocks. Selling do not hedge the stocks as far as i know.
@bikidas2060

@drjpatwa @garamjalebi @BubbleBoyChickenLittle @marketdimer @Theoptionguy

InvestPotato wrote:

For hedging, You always buy a option and gives the premium (cost of option).

You buy PUT option when you suspect that the market will fall –
PUT – It grants the right to the owner to sell an underlying asset at a fixed price (strike rate) through a predetermined time frame

vis-a-versa for call.

OPTION seller are those who taking the gurantee to the movement of stocks. Selling do not hedge the stocks as far as i know.
@bikidas2060

There is a scenario, you can have security backed option selling. There are different option strategies like iron butterfly, iron condor etc. But I have never done any of them so I wont know. But, people speak very high of em. 🙂

InvestPotato wrote:

Selling do not hedge the stocks as far as i know.
@bikidas2060

buy put option with a higher strike price, then selling a put with a lower strike price
For eg. ITC buy 240 put and sell 200 put