Scalping & Hedging
Very short-term trades that aim to capture small price moves, plus offsetting positions that limit how much a portfolio can lose.
- Typical holding period
- 30 seconds to 6 hours
- Positions carried overnight
- None on the scalping book
- Instruments
- Index futures, liquid stock futures, crypto perpetuals
- Minimum engagement
- [PLACEHOLDER: minimum ticket size]
Two related disciplines run by the same desk. Scalping takes many small positions intraday and closes them the same day. Hedging takes deliberately loss-making positions whose purpose is to cap the downside on holdings elsewhere in your portfolio.
Scalping is a volume business, not a prediction business
The desk does not attempt to forecast where an instrument closes. It works liquid instruments where the spread is narrow and size can be entered and exited without moving the price, taking a small edge many times. Because each trade is small, a single loss is survivable and consistency matters more than any one call. Costs are the dominant variable: brokerage, exchange charges, STT and slippage are modelled before a strategy is allowed to trade live.
Hedging is insurance, and it is meant to cost you money
A hedge is a position taken specifically to lose money when the rest of your portfolio gains, in exchange for protecting you when it falls. Common structures are protective puts against a concentrated equity holding and short index futures against a long book. The right question is never whether the hedge made a profit — it is whether the protection was worth its premium given what it was insuring.
Hard limits sit above the strategy
Position sizing, per-day loss limits and a maximum drawdown at which the book stops trading are set before capital is deployed, and are not adjustable by the desk mid-session. [PLACEHOLDER: state your actual daily loss limit and drawdown cut-off.]
What can go wrong
These are the specific ways this desk loses money. They are listed here rather than in a footnote because you should read them before deciding, not after.
- Intraday leveraged trading can lose money faster than any other service on this site. Losses on leveraged derivative positions can exceed the capital allocated to the strategy.
- SEBI studies have repeatedly found that the large majority of individual traders in the equity F&O segment make net losses. Assume you are in that majority unless you have specific evidence otherwise.
- High trade frequency means costs compound. A strategy that is profitable before costs can be unprofitable after brokerage, STT and slippage.
- A hedge reduces upside as reliably as it reduces downside, and an imperfect hedge can lose on both legs at once.
- Past performance of any strategy, including in backtests, does not indicate future results.