Part 3 Institutional Trading Option Styles and Formats
Options come in various forms to suit different strategies:
Vanilla Options: Standard call and put options traded on exchanges.
Exotic Options: Options with complex structures, including barrier, digital, and Asian options.
LEAPS: Long-term options with expiration dates up to three years.
Participants in Option Trading
Option markets attract a range of participants:
Hedgers: Protect existing positions from adverse price movements.
Speculators: Seek to profit from directional price changes or volatility.
Arbitrageurs: Exploit price differences between markets or instruments.
Market Makers: Provide liquidity by quoting buy and sell prices for options.
Advantages of Option Trading
Option trading offers several benefits over traditional trading:
Leverage: Control large positions with smaller capital.
Flexibility: Wide range of strategies for bullish, bearish, and neutral markets.
Risk Management: Ability to hedge stock portfolios and limit losses.
Income Generation: Selling options (writing) generates premium income.
Speculation Opportunities: Capitalize on volatility without owning the underlying asset.
Chart Patterns
Part 1 Ride The Big Moves Introduction to Option Trading
Option trading is a segment of the financial market that allows investors to buy and sell options—financial contracts that grant the right, but not the obligation, to buy or sell an underlying asset at a predetermined price before or on a specified date. Unlike stocks or commodities where ownership is transferred, options are derivatives, meaning their value derives from an underlying asset such as equities, indices, commodities, or currencies.
Options are widely used for hedging, speculation, and income generation. Traders use options to manage risk, enhance returns, and capitalize on market volatility. Global financial markets, including India’s NSE and BSE, have witnessed exponential growth in options trading due to their flexibility and strategic possibilities.
Types of Options
Options are primarily classified into two types: Call Options and Put Options.
Call Options
A call option gives the buyer the right to purchase the underlying asset at a specified price, called the strike price, before or on the option's expiration date. Investors buy calls if they anticipate the price of the underlying asset will rise.
Example: Suppose a stock is trading at ₹100, and an investor buys a call option with a strike price of ₹110. If the stock rises to ₹120, the investor can exercise the option, buy at ₹110, and sell at ₹120, gaining ₹10 minus the premium paid.
Put Options
A put option gives the buyer the right to sell the underlying asset at a specified strike price within a certain timeframe. Investors buy puts if they expect the price of the underlying asset to fall.
Example: A stock trades at ₹150. An investor buys a put option with a strike price of ₹140. If the stock drops to ₹130, the investor can sell it at ₹140, securing a ₹10 profit minus the premium.
IIFL Capital Services at a Critical JunctureThe daily chart for IIFL Capital Services Ltd. reveals a classic technical pattern descending triangle.
The price is now approaching the apex of this triangle, suggesting that a significant price move, or a breakout, is likely to occur soon. A decisive break above the descending trendline on high volume would indicate a bullish reversal, while a break below the crucial horizontal support would signal a bearish continuation of the recent downtrend.
PUNJAB NATIONAL BANKHello & welcome to this analysis
In my previous post on the bank I had suggested the likelihood of it declining to 103 where it had double bullish harmonic patterns. (link to that post is given)
Now the bullish harmonic Bat & reciprocal ABCD patterns are indicating the probability of a rally till 106 & 109 as long as it sustains above 100.
Immediate resistance at 104 with strong support near 102.50
All the best
Breakout ready stock - TIINDIATube Investments of India is pressing against a flat resistance near 3,250–3,270 while making higher lows since March–April, forming a classic ascending triangle; a strong daily close above 3,270–3,300 with good volume would confirm the breakout, after which a conservative upside looks toward 3,450–3,500, then 3,800–3,850, and a full measured move can stretch to 3,950–4,000, whereas on the downside a healthy retest can dip to 3,150–3,170, with the pattern staying valid as long as the rising trendline/3,030 area holds and turning weak only on a decisive break below 2,900.
Latest Gold Update Today!Hello everyone, I hope you're having an explosive trading day!
The gold market is the center of attention today, as after a strong rally that took prices to an all-time high of 3,660 USD/oz, signs of a correction are now emerging.
The main cause of this pullback comes from strong profit-taking by investors after the sharp rise, combined with cautious sentiment ahead of key upcoming US economic data releases like PPI and CPI. As expectations of a Fed rate cut have started to be priced in, buying pressure has weakened, giving way to a growing selling pressure. Moreover, a slight recovery in the USD and bond yields has further reduced gold’s appeal as a safe-haven asset.
On the technical charts, gold has faced rejection multiple times at the 3,640 – 3,660 USD resistance zone, forming long wick candles that indicate strong selling pressure. The price is now testing the EMA34 and may pull back toward the 3,595 – 3,580 USD range, where technical support and an untested liquidity cluster align. This zone is seen as a "momentum balancing" area before gold determines its next direction.
Overall, the long-term trend still leans bullish, but a short-term correction is necessary to bring the market back into balance. For short-term traders, a pullback to the resistance zone could offer a Sell opportunity. Meanwhile, long-term investors should patiently wait to Buy around the 3,58x support zone to stay aligned with the larger trend.
This could be the perfect "buy the dip" opportunity before gold regains its momentum and continues its next rally.
What do you think? Will gold drop further to 3,580 USD before bouncing back, or will it hold steady around 3,600 and quickly form a new high? Share your thoughts below!
Bullish Ascending Triangle pattern🔎 Intro / Overview
The Bullish Ascending Triangle is a continuation pattern that signals strength in an uptrend 📈.
It forms as price creates Higher Highs and Higher Lows in sequence, compressing toward a breakout level.
This structure shows buyers stepping in at higher levels while sellers gradually weaken, often leading to a bullish breakout.
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📌 How to Use
Identify a prior uptrend → the base condition for Ascending Triangle.
Price consolidates by forming Higher Lows and retesting the same resistance level.
Validation → Mark the close of candle that break upper trend line
Devalidation → Swing Low ( when any candle break the upper trend line).
Entry → Confirmed only when price closes above the Validation level .
Stop Loss → Swing Low (Candle break the upper trend line ).
Target → Equal to the measured height of the triangle or 1R multiples.
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🎯 Trading Plan
Entry → On breakout close above Validation level.
Stop Loss → Swing Low (Candle break the upper trend line ).
Target → Conservative 1R, Moderate 2R,
Remaining lots → Trail using ATR, Fibonacci, or structural swing highs.
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📊 Chart Explanation
Price starts in an uptrend.
Forms a sequence of Higher Highs and Higher Lows .
Resistance holds flat at the top, forming the Ascending Triangle shape 🔺.
Breakout above the Higher High Validation line triggers entry ✅.
Swing Low = Devalidation ⛔.
Target 1 achieved 🎯, trailing used for further upside 🚀.
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👀 Observation
Works best as a continuation pattern in established uptrends.
A strong bullish breakout candle adds conviction.
Sideways/choppy markets may cause false breakouts → validation rules filter them.
Volume confirmation strengthens the setup.
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❗ Why It Matters?
Represents buyer dominance with sellers weakening over time.
Provides a clear breakout entry with strict SL and TP.
Helps traders capture trending moves while minimizing false signals.
Rule-based framework improves discipline and consistency.
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🎯 Conclusion
The Bullish Ascending Triangle Pattern is a reliable continuation signal for trend traders.
By combining Higher Highs, Higher Lows, and breakout confirmation, traders can enter with confidence, manage risk, and trail profits effectively.
🔥 Patterns don’t predict. Rules protect. 🚀
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⚠️ Disclaimer
📘 For educational purposes only.
🙅 Not SEBI registered.
❌ Not a buy/sell recommendation.
🧠 Purely a learning resource.
📊 Not Financial Advice.
Tracking the Trend: When Will the Break Come?
The stock continues to consolidate in a sideways trend, and it remains to be seen when this range will break.
Given the company’s strong fundamentals — including a robust order book and tailwinds from increased infrastructure spending — an upward breakout appears more likely.
I’ll keep you all posted as the price action unfolds.
Pokarna Ltd – Descending Triangle TestPokarna hit an ATH of ₹1451.65 before correcting into a descending triangle.
At Fib 0.50 (₹850), the stock found support and bounced sharply with volumes (+12% today).
Now the chart is testing the trendline resistance zone ₹936–940.
Breakout above → Upside potential toward ₹1000.
Failure → Retest of ₹850 support possible.
📊 Currently at a make-or-break level — wait for confirmation before positioning.
XAUUSD: Breaking Through ResistanceXAUUSD is currently trading within a clear uptrend channel, with strong support at 3,620. The 1-hour chart shows that gold has bounced strongly from this support level, confirming that the uptrend remains intact. With support from EMA 34 and EMA 89, XAUUSD is likely to continue its upward momentum and target higher levels.
The current uptrend channel shows the price is moving within a clearly defined range, with higher lows consecutively forming. The next resistance is at 3,680, and if gold breaks through this level, it could extend its rise toward higher targets. The 3,620 level remains a crucial support, and as long as the price stays above this level, the chances of further increases are high.
Impact of News
With the forecasted PPI dropping from 0.9% to 0.3%, this could reduce inflation expectations and weaken the USD, providing favorable conditions for gold to continue rising.
EUROUSD - LongIn this 30-minute chart of EUR/USD where we can see a hammer candle forming exactly at a key support level. A hammer candle indicates that sellers tried to push the price down but buyers came in strongly and managed to close the candle near the opening level. This shows buying interest at the support zone.
Entry: A possible long entry can be considered once the price moves above the high of the hammer candle. Waiting for confirmation above the high reduces the chances of a false signal.
Stop Loss: The stop loss should be placed just below the low of the hammer candle. If the price breaks below that level, it indicates that the support did not hold.
Target: The first target can be set near the recent swing high. If momentum continues, further targets can be trailed higher by adjusting the stop loss. This way, you protect profits while keeping the trade open for a larger move.
Always remember to manage risk properly and not to risk more than a small percentage of your trading capital on a single trade.
Zensar Technologies Ltd – Technical Analysis (Daily, NSE)Current Price: ₹821.30 (+5.59%)
Trend: The stock has been trading within a falling channel since June, indicating a bearish structure.
Key Development:
A strong bullish breakout candle today, breaking above the mid-channel resistance and approaching the upper trend line of the channel.
Resistance Levels:
Primary Resistance: ₹826.50 – ₹830.75
Next target in case of breakout: ₹850 – ₹865 (previous swing highs).
Support Levels:
Immediate Support: ₹780 – ₹790 zone
Strong support near ₹765 – ₹770.
Price Target (on confirmed breakout):
Short-term target: ₹850 – ₹865.
Conservative target: ₹835 – ₹840 if momentum slows near resistance.
Risk Management:
Place stop-loss below ₹780 to protect against false breakouts.
Monitor volume: Higher volume on the breakout strengthens validity.
If the stock fails to sustain above ₹830, expect consolidation or a potential retest of lower support.
⚠️ Disclaimer:
This analysis is for informational purposes only and should not be considered financial advice or a recommendation to buy or sell any security. Investors should conduct their own research or consult a qualified financial advisor before making investment decisions. Market conditions can change rapidly, and past performance is not indicative of future results.
SBIN 30Minutes Time frame📍 SBIN – 30M Important Levels (Current)
🔹 Support Zones
820 – 825 → Immediate intraday support
805 – 810 → Strong support zone; buyers likely to defend
790 – 795 → Major support; breakdown here may trigger deeper downside
🔹 Resistance Zones
840 – 845 → Immediate intraday resistance
855 – 860 → Strong resistance; breakout may extend upside momentum
875 – 880 → Major resistance; if crossed, can fuel a bigger rally
⚖️ 30M Trend Outlook
SBIN is currently in a range-bound to bullish phase on the 30M chart.
Holding above 825 keeps the short-term bias positive.
Breakout above 845 may target 860 – 880.
Breakdown below 825 may pull it back toward 810 – 795.
RELIANCE 30Mitunes Time frame📊 Reliance Industries (30M Chart)
Current Zone: Trading around ₹1,380–₹1,382.
🔻 Support Levels:
₹1,375 → Immediate intraday support
₹1,369–₹1,370 → Strong support zone
₹1,362–₹1,363 → Major support
🔺 Resistance Levels:
₹1,382–₹1,383 → Immediate hurdle
₹1,387–₹1,388 → Strong resistance zone
₹1,394–₹1,395 → Major resistance
📈 Trend Outlook (30M):
Above ₹1,383 → Momentum stays bullish, price may push toward ₹1,388–₹1,395.
Between ₹1,369–₹1,382 → Neutral to slightly bullish consolidation zone.
Below ₹1,369 → Weakness may drag price toward ₹1,363 or lower.
BANKNIFTY 30 Minutes Time frame Bank Nifty (30-Minute Timeframe Snapshot, 10 Sept 2025 ~12:30 PM IST)
Current Level: Around 54,615 – 54,620
Change: Up roughly +400 points (+0.7% approx.) compared to yesterday’s close
Key Pivot Levels (30-min basis)
Pivot: 54,215
Resistance Levels:
R1: 54,351
R2: 54,487
R3: 54,623
Support Levels:
S1: 54,080
S2: 53,944
S3: 53,809
✅ In short: Bank Nifty is trading strongly above its pivot (54,215) and is hovering close to R3 (54,623) on the 30-minute chart, showing bullish momentum.
NIFTY 30Minutes Time frameNifty 50 Snapshot (10 Sept 2025 ~12:30 PM IST)
Current Level: Around 24,990 – 25,000
Change: Up about +125 points (~+0.5%) from the previous close
Pivot Levels (Daily Basis – works for 30-min chart too)
Pivot Point: 24,858
Resistance Levels:
R1: 24,902
R2: 24,936
R3: 24,980
Support Levels:
S1: 24,824
S2: 24,780
S3: 24,747
✅ Analysis (30-Minute View):
Nifty is trading around 25,000, which is above R3 (24,980). This shows strong bullish momentum intraday. If it sustains above R3, the market may extend gains further; otherwise, some profit-booking can pull it back toward R2 or R1 levels.
NTPC seems Bearish !!NTPC technically is getting ready to take support at 310 range ....if 310 too gets broken, major support at 299.
Rounding top fits perfectly and as a result we can expect the down move in the next few days.
Let's wait and watch ...how it moves!!!!
Just my view...not a tip nor advice!!1
Thank you!!
BANKNIFTY 1 Day View📈 Key Support & Resistance Levels
Immediate Support: 53,917
Positional Support: 52,802
Immediate Resistance: 54,673
Positional Resistance: 55,055, 55,592, 55,747, 55,999, 56,042, 56,076
These levels are derived from recent market data and are crucial for day traders to monitor for potential breakout or breakdown scenarios.
🔍 Technical Indicators Overview
Stochastic RSI: Currently in a bullish zone, indicating upward momentum.
Rate of Change (ROC): Positive, suggesting increasing buying interest.
These indicators align with the current bullish sentiment in the market.
🧭 Market Sentiment & Outlook
The Bank Nifty index has shown consistent upward movement, supported by positive market sentiment and favorable macroeconomic factors. If the index maintains its position above the immediate support levels, further gains toward the next resistance zones are possible.
✅ Trading Strategy Recommendations
Bullish Scenario: Consider initiating long positions if the index sustains above 54,673, targeting the next resistance levels.
Bearish Scenario: Monitor for signs of weakness below 53,917, which could lead to a pullback toward the positional support at 52,802.
CHALET 1 day View📊 Intraday Technical Levels (1-Day Timeframe)
🔹 Support Levels:
S1: ₹1,014.39
S2: ₹1,004.16
S3: ₹999.87
S4: ₹954.20
📈 Intraday Support & Resistance Levels
Type Support (S) Resistance (R)
Classic ₹1,025.60 ₹1,074.60
Camarilla ₹1,025.31 ₹1,043.28
Fibonacci ₹1,025.60 ₹1,074.60
Woodie's ₹1,054.30 ₹1,075.65
Demark ₹1,014.40 ₹1,063.40
🔍 Technical Indicators Snapshot
RSI (14): 60.08 – Indicates a mild uptrend.
Stochastic RSI: 0.76 – Suggests strong bullish momentum.
MACD: 5.66 – Positive, confirming upward momentum.
ADX: 37.47 – Indicates a strong trend.
CCI (14): 105.25 – Suggests strong bullish momentum.
EMA (20, 50, 100, 200): All above current price, supporting an uptrend.
Pivot Point: ₹1,025.60
Central Pivot Range (CPR): Top: ₹1,027.70, Bottom: ₹1,023.50
📌 Trading Strategy
Bullish Scenario: A breakout above ₹1,074.60 (R1) could target ₹1,100–₹1,120, with support at ₹1,025.60.
Bearish Scenario: A drop below ₹1,025.60 (pivot) may lead to ₹1,004.16 (S2), with resistance at ₹1,043.28.
Consumer Price Index (CPI) in India1. Understanding the Consumer Price Index (CPI)
The CPI reflects the purchasing power of a country's currency by tracking price changes in a representative basket of goods and services. In India, the Ministry of Statistics and Programme Implementation (MoSPI) compiles the CPI using a base year of 2012. The index is categorized into several groups, including:
Food and Beverages: Comprising items like cereals, pulses, vegetables, fruits, and beverages.
Housing: Reflecting the cost of housing in urban areas.
Clothing and Footwear: Encompassing garments and footwear.
Fuel and Light: Including energy costs such as electricity and fuel.
Miscellaneous: Covering items like education, health, transport, and communication.
Each category has a specific weight in the overall CPI calculation, influencing its impact on the total inflation rate.
2. Recent Trends in India's CPI
July 2025: A Historic Low
In July 2025, India's CPI inflation rate fell to a remarkable 1.55%, the lowest since June 2017. This decline was primarily driven by a significant drop in food prices, with the Consumer Food Price Index (CFPI) turning negative at -1.76%. This marked the first instance of negative food inflation since January 2019
The Times of India
.
The breakdown of inflation rates by sector in July 2025 was as follows:
Rural Areas: Headline inflation at 1.18%, with food inflation at -1.74%.
Urban Areas: Headline inflation at 2.05%, with food inflation at -1.90%.
Combined (All India): Headline inflation at 1.55%, with food inflation at -1.76%
Statistics Ministry
.
These figures indicate a broad-based decline in inflation across both rural and urban sectors.
Factors Contributing to the Decline
Several factors contributed to the sharp decline in CPI inflation:
Base Effect: The high inflation rates in the previous year created a favorable base for comparison, amplifying the perceived decline in current inflation.
Falling Food Prices: A significant decrease in the prices of essential food items, including pulses, vegetables, and cereals, led to negative food inflation.
Stable Fuel Prices: The moderation in fuel prices helped contain overall inflationary pressures.
Government Policies: Measures such as the reduction in Goods and Services Tax (GST) rates on essential items provided relief to consumers and helped lower prices.
3. Sectoral Analysis of CPI Components
Food and Beverages
Food inflation plays a pivotal role in the overall CPI, given its substantial weight in the index. In July 2025, food inflation turned negative, with the CFPI at -1.76%. This was attributed to:
Abundant Harvests: Favorable monsoon conditions led to increased agricultural production, resulting in lower food prices.
Government Interventions: Policies aimed at ensuring food security and stabilizing prices contributed to the decline in food inflation.
Housing
Housing inflation remained relatively stable, with a slight decrease from 3.18% in June 2025 to 3.17% in July 2025. This stability reflects the consistent demand for housing in urban areas and the ongoing challenges in the real estate sector.
Clothing and Footwear
Inflation in this category remained subdued, aligning with the overall trend of reduced consumer spending and stable supply chains.
Fuel and Light
Fuel inflation saw a marginal increase from 2.55% in June 2025 to 2.67% in July 2025. While global oil prices remained volatile, domestic factors such as exchange rates and taxation influenced fuel prices.
Miscellaneous Categories
Education: Inflation in education services remained high at 4.00%, reflecting the increasing cost of private education and related services.
Health: Health inflation stood at 4.57%, driven by rising medical costs and healthcare services.
Transport and Communication: Inflation in this sector was 2.12%, influenced by fuel prices and transportation demand.
4. Regional Disparities in Inflation
Inflation rates varied across different states in India. For instance:
Kerala: Recorded a higher inflation rate due to increased demand and higher costs in urban centers.
Jammu & Kashmir: Experienced elevated inflation, partly due to logistical challenges and supply constraints.
Punjab and Karnataka: Saw moderate inflation rates, reflecting balanced supply and demand dynamics.
These regional disparities underscore the importance of localized economic policies to address specific inflationary pressures.
5. The Role of the Reserve Bank of India (RBI)
The RBI closely monitors CPI inflation as part of its monetary policy framework. The central bank aims to maintain inflation within a target range to ensure economic stability. In response to the declining inflation rates:
Interest Rates: The RBI kept the policy interest rate unchanged at 5.50% in its recent review, citing the benign inflation outlook
Reuters
.
Inflation Targeting: The RBI's flexible inflation targeting framework allows for adjustments in policy to respond to evolving economic conditions.
6. Implications for the Economy
The sharp decline in CPI inflation has several implications:
Consumer Purchasing Power: Lower inflation enhances consumers' purchasing power, potentially boosting demand for goods and services.
Monetary Policy: The RBI's accommodative stance may support economic growth, especially in sectors sensitive to interest rates.
Government Policies: The government may consider fiscal measures to sustain the inflationary trend and support economic recovery.
7. Challenges and Risks
Despite the favorable inflation scenario, several challenges persist:
Global Economic Uncertainties: Fluctuations in global commodity prices and geopolitical tensions can impact domestic inflation.
Supply Chain Disruptions: Ongoing supply chain issues may lead to price volatility in certain sectors.
Monsoon Variability: Dependence on monsoon for agricultural output makes food prices susceptible to climatic variations.
8. Future Outlook
Looking ahead, the CPI inflation trajectory will depend on:
Monsoon Performance: A normal monsoon is crucial for stable food prices.
Global Commodity Prices: Movements in global oil and commodity markets will influence domestic inflation.
Policy Interventions: Continued fiscal and monetary measures will play a role in managing inflation expectations.
Economists forecast that CPI inflation may remain within the RBI's target range in the near term, barring significant external shocks.
9. Conclusion
The Consumer Price Index serves as a vital barometer of economic health in India. The recent decline in CPI inflation reflects a combination of favorable domestic conditions and effective policy measures. However, sustained vigilance is necessary to address emerging challenges and ensure that inflation remains conducive to economic growth and stability.