Part 10 Trading Masterclass With ExpertsTypes of Options
There are two fundamental types of options:
(a) Call Option
A call option gives the buyer the right to buy the underlying asset at a fixed strike price before or on expiration.
Buyers of calls expect the price to rise.
Sellers of calls expect the price to stay flat or fall.
Example:
Suppose you buy a call option on TCS with a strike price of ₹3,500, expiring in one month. If TCS rises to ₹3,800, you can exercise the option and buy at ₹3,500, making a profit. If TCS stays below ₹3,500, you lose only the premium.
(b) Put Option
A put option gives the buyer the right to sell the underlying asset at the strike price before or on expiration.
Buyers of puts expect the price to fall.
Sellers of puts expect the price to rise or stay stable.
Example:
You buy a put option on Infosys with a strike of ₹1,500. If Infosys drops to ₹1,200, you can sell at ₹1,500 and earn profit. If Infosys stays above ₹1,500, you lose only the premium.
The Four Basic Positions
Every option trade can be boiled down to four core positions:
Long Call – Buying a call (bullish).
Short Call – Selling a call (bearish/neutral).
Long Put – Buying a put (bearish).
Short Put – Selling a put (bullish/neutral).
All advanced strategies are combinations of these four.
Chart Patterns
Part 7 Trading Masterclass With ExpertsOptions Greeks and Their Role
Every strategy depends heavily on the Greeks:
Delta: Sensitivity to price changes.
Gamma: Rate of change of delta.
Theta: Time decay of option value.
Vega: Sensitivity to volatility.
Rho: Sensitivity to interest rate changes.
Traders use Greeks to fine-tune strategies and manage risk exposure.
Risk Management in Options
Risk control is crucial. Key principles:
Never risk more than you can afford to lose.
Use spreads instead of naked options.
Monitor Greeks daily.
Diversify across strikes and expiries.
Set stop-loss and exit plans.
Part 6 Institutional Trading Advanced & Professional Strategies
(a) Butterfly Spread
Combination of 3 strike prices (buy 1 low strike call, sell 2 middle strike calls, buy 1 high strike call).
Profits from minimal price movement.
(b) Calendar Spread
Sell near-term option and buy long-term option at the same strike.
Profits from time decay difference.
(c) Ratio Spread
Buy 1 option, sell 2 options at different strikes.
Increases reward potential but adds risk.
(d) Box Spread
Arbitrage-like strategy combining bull and bear spreads.
Used by professionals for risk-free returns (if pricing inefficiency exists).
Part 3 Institutional Trading Popular Basic Strategies
(a) Covered Call
Buy the underlying stock and sell a call option.
Used to earn extra income if you already own shares.
Risk: Stock price falls.
Reward: Premium + limited upside.
(b) Protective Put
Buy stock and simultaneously buy a put option.
Acts like insurance — protects against downside risk.
Example: If you own TCS stock at ₹3500, buy a 3400 put.
Risk: Premium paid.
Reward: Unlimited upside with limited downside.
(c) Long Call
Buy a call option expecting the price to rise.
Limited risk (premium paid), unlimited reward.
Example: Buy Nifty 20,000 CE at 100 premium.
(d) Long Put
Buy a put option expecting a fall in price.
Limited risk (premium), large profit potential in downturns.
Part 1 Ride The Big Moves Introduction to Options Trading
Options are one of the most versatile financial instruments in modern markets. Unlike stocks, where you directly buy or sell ownership in a company, options give you the right but not the obligation to buy (Call Option) or sell (Put Option) an underlying asset at a predetermined price within a specific period.
What makes options special is their flexibility. They allow traders to speculate, hedge, or generate income depending on market conditions. This versatility leads to the creation of numerous option trading strategies — each designed to balance risk and reward differently.
Understanding these strategies is crucial because trading options blindly can lead to substantial losses. Proper strategies help traders make calculated decisions, limit risk exposure, and maximize potential returns.
Basic Concepts in Options
Before diving into strategies, let’s clarify some key terms:
Call Option: Gives the holder the right (not obligation) to buy an asset at a specific strike price before expiry.
Put Option: Gives the holder the right (not obligation) to sell an asset at a specific strike price before expiry.
Strike Price: The pre-agreed price at which the option can be exercised.
Premium: The price paid to buy the option contract.
Expiry Date: The last date when the option can be exercised.
In-the-Money (ITM): When exercising the option is profitable.
Out-of-the-Money (OTM): When exercising the option is not profitable.
At-the-Money (ATM): When the strike price is equal to the current market price.
Options strategies are built by combining calls, puts, and underlying assets in different proportions.
Multi-Confirmation Price Action: Fibonacci Zones, Base BreakoutsExplore multi-confirmation techniques using Fibonacci retracement to identify high-probability base breakout zones. Learn how to spot double bottom and inverted head & shoulders patterns at demand levels and execute confirmation trades for precision entries
Trading Master Class With ExpertsWhat are Options? (Basics)
An Option is a financial contract between two parties:
Buyer (Holder): Pays a premium for the right (not obligation) to buy/sell.
Seller (Writer): Receives the premium and has an obligation to honor the contract.
There are two basic types:
Call Option (CE) – Right to buy.
Put Option (PE) – Right to sell.
Example:
Suppose Infosys stock is trading at ₹1500. You buy a Call Option with a strike price of ₹1550 expiring in 1 month. If Infosys goes above ₹1550, you can exercise your right to buy at ₹1550 (cheaper than market). If it doesn’t, you just lose the small premium you paid.
This flexibility is the beauty of options.
Key Terms in Options Trading
Before diving deeper, let’s understand some key terms:
Strike Price: The fixed price at which you can buy/sell the asset.
Premium: The price paid to buy the option.
Expiry Date: The date on which the option contract expires.
Lot Size: Options are traded in lots (e.g., 25 shares per lot for Nifty options).
In-the-Money (ITM): When exercising the option is profitable.
Out-of-the-Money (OTM): When exercising would cause a loss.
At-the-Money (ATM): When the strike price = current market price.
Option Buyer: Pays premium, has limited risk but unlimited profit potential.
Option Seller (Writer): Receives premium, has limited profit but unlimited risk.
Types of Options – Calls and Puts
Call Option (CE)
Buyer has the right to buy.
Profits when the price goes up.
Put Option (PE)
Buyer has the right to sell.
Profits when the price goes down.
Example with Reliance stock (₹2500):
Call Option @ 2600: Profitable if Reliance goes above ₹2600.
Put Option @ 2400: Profitable if Reliance goes below ₹2400.
Part 2 Master Candlestick PatternOptions in Global Markets
US Market: Options on stocks like Apple, Tesla, S&P500.
Europe: Eurex exchange trades DAX options.
India: NSE is Asia’s largest derivatives market.
Global options markets allow hedging and speculation across geographies.
The Psychology of Options Trading
Fear and greed dominate decisions.
Beginners often chase quick profits.
Professionals focus on probabilities, not predictions.
Patience and discipline are key.
Future of Options Trading
Increasing retail participation in India.
Weekly expiries, more instruments expected.
AI & Algo trading to dominate.
More global integration with India’s markets.
Part 1 Master Candlestick PatternOptions vs Stocks/Futures
Stocks: You own a part of the company.
Futures: Obligation to buy/sell in future.
Options: Right, but not obligation, with flexibility.
Common Mistakes by Beginners
Over-leveraging with big lots.
Only buying cheap OTM options.
Ignoring time decay.
Not using stop-loss.
Blindly copying tips without understanding.
Risk Management in Options
Never risk more than 2–5% of capital in one trade.
Use stop-loss orders.
Avoid holding losing options till expiry.
Use spreads to limit risk.
Keep emotions under control.
Option Trading Risks of Options Trading
High Risk for Sellers: Unlimited losses possible.
Complexity: Requires deep understanding.
Time Decay: Options lose value as expiry approaches.
Liquidity Issues: Some contracts may not have enough buyers/sellers.
Over-leverage: Small mistakes can wipe out capital.
Options Pricing
An option’s premium depends on:
Intrinsic Value (IV): Actual profit if exercised now.
Time Value (TV): Extra value due to time left till expiry.
Formula:
Premium = Intrinsic Value + Time Value
Example: Nifty at 20,000
Call @ 19,800 = Intrinsic value 200.
If premium is 250 → Time value = 50.
The Greeks (Advanced Concept)
Options pricing is also affected by "Greeks":
Delta: Sensitivity to price change.
Theta: Time decay effect.
Vega: Impact of volatility.
Gamma: Acceleration of delta.
These help traders understand risks better.
Part 2 Support and ResistanceKey Terms in Options Trading
Before diving deeper, let’s understand some key terms:
Strike Price: The fixed price at which you can buy/sell the asset.
Premium: The price paid to buy the option.
Expiry Date: The date on which the option contract expires.
Lot Size: Options are traded in lots (e.g., 25 shares per lot for Nifty options).
In-the-Money (ITM): When exercising the option is profitable.
Out-of-the-Money (OTM): When exercising would cause a loss.
At-the-Money (ATM): When the strike price = current market price.
Option Buyer: Pays premium, has limited risk but unlimited profit potential.
Option Seller (Writer): Receives premium, has limited profit but unlimited risk.
Types of Options – Calls and Puts
Call Option (CE)
Buyer has the right to buy.
Profits when the price goes up.
Put Option (PE)
Buyer has the right to sell.
Profits when the price goes down.
Example with Reliance stock (₹2500):
Call Option @ 2600: Profitable if Reliance goes above ₹2600.
Put Option @ 2400: Profitable if Reliance goes below ₹2400.
Part 1 Support and ResistanceIntroduction to Options Trading
Trading in the stock market has many forms: buying shares, trading futures, investing in mutual funds, or speculating in commodities. Among all these, Options Trading is one of the most exciting and complex areas.
Options trading gives traders the right, but not the obligation, to buy or sell an underlying asset (like a stock, index, or commodity) at a fixed price before a fixed date.
In simple words:
If you buy a Call Option, you are betting that the price will go up.
If you buy a Put Option, you are betting that the price will go down.
Options give flexibility—traders can profit from rising, falling, or even sideways markets if they use the right strategies. That’s why they are called derivative instruments (their value is derived from an underlying asset).
What are Options? (Basics)
An Option is a financial contract between two parties:
Buyer (Holder): Pays a premium for the right (not obligation) to buy/sell.
Seller (Writer): Receives the premium and has an obligation to honor the contract.
There are two basic types:
Call Option (CE) – Right to buy.
Put Option (PE) – Right to sell.
Example:
Suppose Infosys stock is trading at ₹1500. You buy a Call Option with a strike price of ₹1550 expiring in 1 month. If Infosys goes above ₹1550, you can exercise your right to buy at ₹1550 (cheaper than market). If it doesn’t, you just lose the small premium you paid.
This flexibility is the beauty of options.
USDJPY MULTI TIME FRAME ANALYSISHello traders , here is the full multi time frame analysis for this pair, let me know in the comment section below if you have any questions , the entry will be taken only if all rules of the strategies will be satisfied. wait for more price action to develop before taking any position. I suggest you keep this pair on your watchlist and see if the rules of your strategy are satisfied.
🧠💡 Share your unique analysis, thoughts, and ideas in the comments section below. I'm excited to hear your perspective on this pair .
💭🔍 Don't hesitate to comment if you have any questions or queries regarding this analysis.
BTC/USD
The BTC/USD trade with an entry price of 109,225, stop-loss at 108,886, and exit price at 110,075 is a structured buy trade setup aimed at capturing short-term upside momentum. The trade carries a potential profit of about 850 points while risking around 339 points, giving a solid risk-to-reward ratio of approximately 1:2.
The entry at 109,225 suggests the position was taken after observing bullish signals, such as a bounce from support, a breakout, or confirmation from indicators like RSI or MACD turning upward. This level provides a favorable point to benefit from expected buying strength in BTC/USD.
The stop-loss at 108,886 is set just below support, ensuring that any unexpected downside movement is contained with minimal loss.
The exit price at 110,075 serves as the take-profit level, positioned near a resistance zone to lock in gains before a potential reversal.
This trade demonstrates disciplined risk management and precise planning in a volatile market.
Nifty 1 September 2025The **Nifty 50** is one of the most important stock market indices in India, representing the performance of the top 50 large-cap companies listed on the National Stock Exchange (NSE). Introduced in 1996 by NSE, it serves as a benchmark index that reflects the overall health and direction of the Indian equity market. These 50 companies are carefully selected from various sectors such as banking, information technology, energy, pharmaceuticals, consumer goods, and automobiles, thereby providing a diversified view of the economy. The index is calculated using the free-float market capitalization-weighted method, which ensures that only the shares available for trading in the market are considered. Investors, traders, mutual funds, and foreign institutional investors closely track the Nifty 50 as it acts as a barometer for market sentiment and investment decisions. It is widely used for benchmarking portfolio performance, creating index funds, and derivative trading like futures and options. The index reflects not only the strength of leading companies but also the broader growth potential of the Indian economy. By capturing around 65% of the NSE’s total market capitalization, the Nifty 50 plays a vital role in guiding both domestic and global investors about India’s financial markets.
Part 4 Learn Institutional TradingBasics of Options (Calls & Puts)
There are two main types of options:
Call Option: Gives the holder the right to buy the underlying asset at a fixed price (called the strike price) before or on the expiry date.
Example: You buy a Reliance call option with a strike price of ₹2500. If Reliance rises to ₹2700, you can buy at ₹2500 and gain from the difference.
Put Option: Gives the holder the right to sell the underlying asset at the strike price before expiry.
Example: You buy a Nifty put option with a strike price of 22,000. If Nifty falls to 21,500, your put gains in value since you can sell higher (22,000) while the market trades lower.
In simple terms:
Calls = Right to Buy
Puts = Right to Sell
How Options Work (Premiums, Strike Price, Expiry, Moneyness)
Every option has certain key components:
Premium: The price you pay to buy the option. This is determined by demand, supply, volatility, and time to expiry.
Strike Price: The fixed price at which the option holder can buy/sell the asset.
Expiry Date: Options are valid only for a certain period. In India, index options have weekly and monthly expiries, while stock options usually expire monthly.
Moneyness: This defines whether an option has intrinsic value.
In the Money (ITM): Already profitable if exercised.
At the Money (ATM): Strike price equals the current market price.
Out of the Money (OTM): Not profitable if exercised immediately.
Part 3 Learn Institutional TradingGlobal Options Markets
Globally, options trading is massive:
CBOE (Chicago Board Options Exchange): World’s largest options exchange.
Europe & Asia: Active index and currency options markets.
US Markets: Stock options are highly liquid, with advanced strategies widely used.
Technology, Algo & AI in Options
Modern option trading heavily depends on:
Algorithmic Trading: Automated systems for fast execution.
AI Models: Predicting volatility & price patterns.
Risk Management Software: Real-time monitoring of Greeks.
Conclusion (Tips for Traders)
Options trading is exciting but requires discipline. Beginners should:
Start with buying calls/puts before attempting writing.
Learn about Greeks, volatility, and time decay.
Always use risk management—stop losses & hedges.
Avoid over-leverage.
Practice strategies on paper trading before using real money.
In short, options are a double-edged sword—powerful for hedging and profit-making, but risky without knowledge. With patience, discipline, and continuous learning, traders can use options effectively in any market condition.
PCR Trading StrategiesIntroduction to Options Trading
The world of financial markets is vast, offering different ways to invest, trade, and manage risks. Among these instruments, Options have gained immense popularity because they offer flexibility, leverage, and unique strategies that regular stock trading cannot provide.
Options trading is not new—it has been around for decades in global markets—but in recent years, with the rise of online platforms and growing financial literacy, even retail traders are actively participating in it.
At its core, an option is a financial contract that gives the buyer the right, but not the obligation, to buy or sell an underlying asset (like a stock, index, currency, or commodity) at a predetermined price, within a certain period. This ability to choose—without compulsion—is what makes options unique compared to other financial products.
Basics of Options (Calls & Puts)
There are two main types of options:
Call Option: Gives the holder the right to buy the underlying asset at a fixed price (called the strike price) before or on the expiry date.
Example: You buy a Reliance call option with a strike price of ₹2500. If Reliance rises to ₹2700, you can buy at ₹2500 and gain from the difference.
Put Option: Gives the holder the right to sell the underlying asset at the strike price before expiry.
Example: You buy a Nifty put option with a strike price of 22,000. If Nifty falls to 21,500, your put gains in value since you can sell higher (22,000) while the market trades lower.
In simple terms:
Calls = Right to Buy
Puts = Right to Sell
Part 1 Trading Master ClassReal-World Applications of Options
Hedging
Institutions hedge portfolios using index options. For example, buying Nifty puts to protect against market crash.
Income Generation
Funds sell covered calls or iron condors to earn steady income.
Event-Based Trading
Earnings announcements, policy changes, and global events cause volatility—ideal for straddles or strangles.
Speculation with Leverage
Traders use calls/puts for leveraged bets on short-term moves.
Pros and Cons of Options Trading
Pros
Flexibility in strategy.
Limited risk (for buyers).
High leverage.
Ability to profit in all market conditions.
Cons
Complexity.
Time decay erodes value of options.
Volatility risk.
Unlimited risk (for sellers).
Option Trading Advanced Options Strategies
Professional traders use combinations for specific market conditions.
Butterfly Spread
Outlook: Neutral, low volatility.
How it works: Combination of bull and bear spreads with three strikes.
Risk/Reward: Limited both ways.
Calendar Spread
Outlook: Neutral with time decay advantage.
How it works: Sell near-term option, buy longer-term option (same strike).
Benefit: Profit from faster time decay of short option.
Ratio Spread
Outlook: Directional but with twist.
How it works: Buy one option and sell more options of the same type.
Risk: Potentially unlimited.
Reward: Limited to premium collected.
Collar Strategy
Outlook: Hedge with limited upside.
How it works: Own stock, buy protective put, sell covered call.
Use: Lock in gains, reduce downside.
Risk Management in Options Trading
Options carry significant risks if misused. Successful traders emphasize:
Position Sizing: Never risk too much on one trade.
Diversification: Spread across multiple strategies/assets.
Stop-Loss & Adjustments: Exit losing trades early.
Implied Volatility (IV) Awareness: High IV increases premiums; selling strategies may be better.
Divergence SectersIntermediate Options Strategies
These involve combining calls and puts to create structured payoffs.
Bull Call Spread
Outlook: Moderately bullish.
How it works: Buy a call (lower strike), sell another call (higher strike).
Risk: Limited to net premium.
Reward: Limited to strike difference minus premium.
Example: Buy ₹100 call at ₹5, sell ₹110 call at ₹2. Net cost ₹3. Max profit = ₹7.
Bear Put Spread
Outlook: Moderately bearish.
How it works: Buy a put (higher strike), sell another put (lower strike).
Risk: Limited to net premium.
Reward: Limited.
Iron Condor
Outlook: Neutral, low volatility.
How it works: Sell OTM call and put, buy further OTM call and put.
Risk: Limited.
Reward: Premium collected.
Best for: Range-bound markets.
Straddle
Outlook: Expect big move (up or down).
How it works: Buy one call and one put at same strike/expiry.
Risk: High premium cost.
Reward: Unlimited if strong move.
Strangle
Outlook: Expect volatility but uncertain direction.
How it works: Buy OTM call + OTM put.
Risk: Lower premium than straddle.
Reward: Unlimited if strong price move.
Part 1 Support and ResistanceIntroduction
Options trading is one of the most fascinating and versatile aspects of the financial markets. Unlike stocks, which give ownership in a company, or bonds, which provide fixed income, options are derivative instruments whose value is derived from an underlying asset such as stocks, indices, commodities, or currencies. They give traders the right, but not the obligation, to buy or sell the underlying asset at a predetermined price before a specific expiration date.
Because of this unique characteristic, options allow traders and investors to design strategies that suit a wide range of market conditions—whether bullish, bearish, or neutral. Through careful strategy selection, one can aim for limited risk with unlimited upside, hedge existing positions, or even profit from sideways markets where prices don’t move much.
This article explores options trading strategies in detail. We’ll cover the building blocks of options, common strategies, advanced combinations, and risk management. By the end, you’ll have a strong foundation to understand how professional traders use options to manage portfolios and generate returns.
1. Basics of Options
Before diving into strategies, it’s important to review some fundamental concepts.
1.1 What is an Option?
Call Option: Gives the holder the right (not obligation) to buy the underlying asset at a predetermined price (strike price) before or on expiration.
Put Option: Gives the holder the right (not obligation) to sell the underlying asset at a predetermined price before or on expiration.
1.2 Key Terms
Premium: The price paid to buy an option.
Strike Price: The agreed price to buy or sell the underlying.
Expiration Date: The last day the option can be exercised.
Intrinsic Value: Difference between underlying price and strike (if favorable).
Time Value: Portion of the premium that reflects time until expiration.
1.3 Options Styles
European Options: Exercisable only at expiration.
American Options: Exercisable any time before expiration.
XAU/USDThis XAU/USD setup is a sell trade, highlighting a bearish short-term outlook on gold. The entry price is 3414, with a stop-loss at 3423 and an exit price at 3396. This trade seeks to capture an 18-point profit while risking 9 points, maintaining a balanced 1:2 risk-to-reward ratio.
Selling at 3414 suggests the trader expects downward pressure, possibly triggered by strength in the U.S. dollar, rising bond yields, or profit-booking after recent gains. The exit at 3396 is strategically placed near a support area where buyers might re-enter, making it a logical profit-taking level. The stop-loss at 3423 limits potential losses if bullish momentum resumes, ensuring disciplined risk management. This setup is ideal for short-term traders looking to ride intraday weakness.