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Selvaraj has 1000 shares of say Bank Nifty brought at average price of Rs.…

- - - - Selvaraj will SELL a FUTURES contract to Bunty obliging Bunty that on 30th Jan whatever market price be Bunty will have to buy Bank Nifty from him at Rs.200 each.
        (1st Jan) Nifty Bank Spot = Rs. 150
        (1st Jan) Nifty Bank Futures Spot = Rs. 151
        
        Here Bunty is of the opinion that on 30th Jan (Contract Expiry Day) market will rise beyond the price of Rs.200 and he will get shares worth Rs.say 225 at a discounted price of Rs.200
        
        Now Again 3 scenarios can happen.
        
        Price falls below Rs. 150
        
        What if Price Goes Beyond Rs. 200 on the day of contract expiry day? What will Selvaraj can do?
        
        Two cases / Options for Selvaraj
        
        Selvaraj will be happy with the Profits made after the contract gets executed on Expiry Day.
        
        Selvaraj wants to take advantage of market price on expiry day OR may be Selvaraj does not even have 1000 shares of Bank Nifty and now he has to make settlement by buying shares from market at higher price than Rs.200 and sell the shares at loss at contract price of Rs.200. Selvaraj wants to hedge this situation too !!!
        
        Thinking that Market may rise
        Selvaraj will Sell PUT option for a suitable strike price.
        
        1 more item...
        
        Price stays at Rs.150
        
        No worries, Bunty will buy at Rs. 200 and Selvaraj will be in profit.