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Divergence Secrets Risks in Option Trading High volatility risk Time decay for buyers Unlimited loss for sellers Gap-up or gap-down opening risk Liquidity issues in stock options Wrong position sizing leads to heavy losses Tips for Option Traders Always trade with a clear plan: entry, exit, stop-loss. Avoid trading just before big news events unless experienced. Track global markets, FIIs, indices. Manage risk: never risk more than 1–2% of capital per trade. Learn option Greeks—Delta, Theta, Vega are essential. Start with buying options; move to selling only after experience. Avoid low-liquidity contracts.
TVC:DXYEducation
by SkyTradingZone
Part 1 Intraday Master ClassUnderstanding Options: Basic Terms Before going into the rules, you must understand the core terms: a) Call Option A call option gives the buyer the right, but not the obligation, to buy an asset (like Nifty, Bank Nifty, stocks) at a fixed price. b) Put Option A put option gives the buyer the right, but not the obligation, to sell an asset at a fixed price. c) Strike Price The price at which the option buyer can buy (call) or sell (put) the underlying asset. d) Premium The price paid by the option buyer to the option seller (writer). Premium is non-refundable. e) Expiry Date The last date on which the option contract is valid. After expiry, the contract becomes worthless. f) Lot Size Each option contract is traded in fixed quantities called “lots.” You cannot buy 1 share in options, only lots.
Education
by SkyTradingZone
Part 12 Trading Master Class With ExpertsHow Profit and Loss Works in Options For Buyers Profit = (Intrinsic value – Premium paid) × Lot size Maximum loss = Premium paid Big profits only occur with sharp directional moves. For Sellers Profit = Premium received Maximum loss = Unlimited (if market moves against you) Sellers benefit from sideways market and time decay. Margin Requirements Option sellers need large margin because risk is high. Option buyers only pay the premium. NSE uses SPAN + Exposure for calculating margin.
NSE:KOTAKBANKEducation
by SkyTradingZone
Part 11 Trading Master Class With Experts Option Greeks (Foundation of Option Trading) Option Greeks control how premiums move. Every trader must understand them. Delta Measures directional movement. CE delta: positive (0 to 1) PE delta: negative (0 to -1) Theta Time decay. Premium decreases as expiry approaches. Big threat for option buyers; advantage for sellers. Vega Impact of volatility. High volatility = high premium. Gamma Rate of change of delta. Explains how fast an option becomes reactive to price.
NSE:HCLTECHEducation
by SkyTradingZone
Part 10 Trade Like Institutons Call Option (CE) Explained A call option benefits from price going UP. Call Buyer Pays premium. Unlimited profit potential. Loss limited to premium paid. Call Seller Receives premium. Profit limited to premium received. Loss can be unlimited if price rises sharply. Example: You buy Nifty 22000 CE for ₹100. If Nifty moves to 22100 at expiry, your option becomes ITM (In-the-money). Intrinsic value = 22100 – 22000 = 100 You break even at 22100. If Nifty moves to 22200, Intrinsic value = 200 Profit = 200 – 100 = 100.
NSE:HINDALCOEducation
by SkyTradingZone
Part 7 Trading Master Class With Experts What Are Options? Options are derivative instruments whose value is derived from an underlying asset such as Nifty, Bank Nifty, stocks, commodities, or currencies. An option is a contract between a buyer and seller regarding the future price of an asset within a specific time. There are two types of options: Call Option (CE) – Gives the buyer the RIGHT (but not the obligation) to BUY the asset at a fixed price (strike price). Put Option (PE) – Gives the buyer the RIGHT (but not the obligation) to SELL the asset at a fixed price. The seller (also called option writer) has the OBLIGATION to fulfill the contract if the buyer exercises the option.
NSE:BHARTIARTLEducation
by SkyTradingZone
Cadnle Patterns Mistakes Traders Make With Candle Patterns Mistake 1: Trading Every Pattern Not every hammer means buy; not every engulfing means reversal. Mistake 2: Ignoring the Trend Trend is king. Patterns against trend are less reliable. Mistake 3: No Confirmation Waiting for confirmation improves accuracy. Mistake 4: Overlooking Market Structure Support/resistance is more powerful than candle patterns. Mistake 5: Using Candles Alone Combine with other tools for best results.
NSE:RELIANCEEducation
by TechnicalExpress
Premium Chart Pattern Knowledge Psychological Foundations of Premium Patterns Premium patterns are effective because they exploit: 1. Retail Traders’ Fear People exit during fake breakouts. 2. Greed People enter late into a move. 3. Manipulation Institutions trigger false moves to collect liquidity. 4. Volume Behavior Smart money enters quietly and exits loudly. 5. Market Cycles Price moves in phases—accumulation, manipulation, trend, distribution. Premium chart patterns help traders recognize these phases.
NSE:HINDUNILVREducation
by TechnicalExpress
Part 6 Learn Institutional TradingRisks & Disclosures: Essential Terms a) Market Risk Options move faster than stock prices; losses can be sudden. b) Volatility Risk Option prices are sensitive to market volatility (VIX). High volatility increases premium. c) Time Decay (Theta) Options lose value as expiry approaches — especially out-of-money options. d) Liquidity Risk Low-volume contracts may have difficulty in entering/exiting positions. e) Assignment Risk for Sellers Sellers can be assigned at any time on expiry day. f) Slippage Rapid price movements may cause orders to execute at worse prices.
NSE:BANKNIFTYEducation
by SkyTradingZone
Part 3 Learn Institutional Trading Expiry & Settlement Terms a) Index Options (Nifty, Bank Nifty) They are settled in cash, not in shares. b) Stock Options They are settled through physical delivery of shares if the contract expires in-the-money. c) European Style Options (India) Indian markets allow exercise only on expiry day, unlike American options (any time). d) Premium Settlement Premium is paid upfront while taking the position. e) Final Settlement Price (FSP) Exchanges calculate it based on the closing price of the underlying asset on expiry.
NSE:IGLEducation
by SkyTradingZone
Part 2 Ride The Big MovesMargin Requirements: Critical Conditions Margins are financial requirements that protect the market from defaults. a) Initial Margin This is required when the position is opened. It includes: SPAN margin Exposure margin b) Maintenance Margin Traders must maintain a minimum balance to keep positions open. c) Additional Margin If volatility increases, brokers may collect extra margins. d) Physical Delivery Margin Mandatory if stock options are taken near expiry. e) Penalties Failure to meet margin requirements leads to: Squaring off of positions Penalty charges Blocking of trading account Understanding margin rules is crucial for safe option trading.
Education
by SkyTradingZone
Part 1 Ride The Big Moves Obligations of Option Sellers Option sellers carry more responsibility: a) Seller Must Follow Buyer’s Decision If the buyer decides to exercise, the seller must honor the contract. b) Unlimited Risk for Naked Sellers Losses can be unlimited if markets move strongly against the seller. c) Mandatory Margin Requirement Sellers need to maintain margin balance to cover potential losses. d) Mark-to-Market Loss Adjustments Brokers deduct daily losses from the seller’s trading account. e) Physical Delivery for Stock Options For stock options close to expiry, sellers may have to deliver shares physically if the contract expires in-the-money.
TVC:GOLDEducation
by SkyTradingZone
Part 2 Intraday Master ClassRights of Option Buyers Option buyers have certain rights defined by the exchange: a) Right to Buy (Call Buyer) The buyer can buy the asset at the strike price even if market price is higher. b) Right to Sell (Put Buyer) The buyer can sell at the strike price even if market price is lower. c) No Obligation to Exercise If the market is not favorable, traders can let the contract expire without exercising. d) Limited Risk The maximum loss for option buyers is the premium paid. e) Unlimited Profit Potential Call buyers can profit from rising markets Put buyers can profit from falling markets These rights are protected by the exchange, SEBI rules, and clearing corporations.
BSE:SENSEXEducation
by SkyTradingZone
PCR Trading Strategies Tips to Increase Your Profitability ✓ Trade with trend Avoid buying OTM options randomly. Wait for momentum. ✓ Use volume profile & market structure This helps identify breakout zones, reversal points, and premium traps. ✓ Avoid trading against volatility Buy in low IV, sell in high IV. ✓ Don’t hold losing positions Options decay fast → exit quickly if the market goes against you. ✓ Use hedged strategies Spread strategies reduce risk and stabilize profits.
TVC:USOILEducation
by SkyTradingZone
Part 2 Trading Master ClassHow Option Sellers Earn Profit Option sellers (writers) make money very differently from buyers. Sellers earn through: Premium collection Time decay (Theta) working in their favor Market staying within a defined range Selling gives higher probability of profit but unlimited risk if the market moves aggressively. Example: You sell Bank Nifty 49,000 CE at ₹220 Market stays sideways or falls Premium collapses to ₹30 Your Profit = (220 – 30) × Lot Size This profit results from the sold option expiring worthless.
Education
by SkyTradingZone
Part 1 Trading Master ClassHow Put Options Generate Profit A Put Option gives you the right to sell an asset at a fixed strike price. You profit from a put when: Underlying price moves below strike Premium increases because market falls Example: Nifty at 22,000 You buy Put 22,000 PE for ₹100 Market falls to 21,700 Premium rises to ₹210 Your Profit = (210 – 100) × Lot Size Put buyers make money when markets fall, similar to short selling but with limited risk.
Education
by SkyTradingZone
Part 2 Support and Resistance How Call Options Generate Profit A Call Option gives you the right—but not obligation—to buy an asset at a fixed price (strike price). You profit from a call option when: The market price goes above the strike price. The premium increases due to: Price movement Increased volatility Reduced time to expiry near ITM levels Example: Nifty trading at 22,000 You buy Call 22,000 CE at ₹120 Price moves to 22,200 Premium increases to ₹200 Your Profit = (200 – 120) × Lot Size This profit comes without buying the actual index—just the premium appreciation.
NSE:ASIANPAINTEducation
by SkyTradingZone
Part 1 Support and Resistance Understanding the Foundation of Option Profits Before diving into strategies, two basic forces determine profit in options: A. Price Movement of the Underlying If the underlying asset (stock, index, commodity) moves in the direction you expect, your option gains value. Calls gain when price goes up Puts gain when price goes down B. Premium (Option Price) Premium is the amount you pay (for buyers) or receive (for sellers/writers). Profit/loss happens based on how this premium changes.
NSE:HINDUNILVREducation
by SkyTradingZone