What To Do When The Stock Markets are Falling

Do not panic when the stock markets are falling. Keep patience and wait for the markets to rebound.

From 20,192.35 on 15-Sep-23 to 18,877.20 on 26-Oct-23. Looks like a big fall right? Yes, it looks, but in percentage terms, it is just a 6.51 per cent fall.

NSE 26-Oct-23

In my opinion, it is not something to fear about. But in reality, see what is happening in the markets. Nifty VIX (a.k.a India VIX) has risen 9.70% today:

India VIX 26-Oct-23

If you do not know India VIX is the measurement of panic in the markets. It is inversely proportional to stock markets – not just in India but across the world.

You can read more about India VIX here:
https://www.theoptioncourse.com/nifty-and-india-vix-are-inversely-proportional/

Strangely, HNIs who have invested a lot in the markets do not panic in the fall – they make decisions based on fundamentals, not percentage fall. They will never invest in a company that looks weak in fundamentals. They see fall as an opportunity to accumulate more stocks. But they will add more only in fundamentally strong stocks. They leave the not-so-fundamentally strong stocks. They do not add more stocks.

They have the patience to hold.
My advice: Copy them. Do not sell your stocks in a panic.

This is not the first time stock markets have fallen more than 6 per cent. Every time it falls, it rebounds. So wait for that re-bounce.

Other things that you can do.

If you are an HNI you can do covered calls and make a monthly income during falls. There is a good way to do covered calls however since it is part of my paid course  I may not be able to explain here.

Or you can create a married put. You can read about married-put here:
https://www.theoptioncourse.com/married-put-explained/

Married put is a put option bought to protect losses from further fall of the stock. If the stock falls the put will make money.

Hedging is a beautiful tool to save huge losses in options, futures or even equities. Though my course is limited to Nifty and Bank Nifty options and futures hedging – once you learn hedging you will be able to trade anywhere like commodities, Nifty Finance, BSE Options and Futures, USD-INR pair trading etc. and create a hedge.

You can check my course fee here.

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