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Options-strategy

#How to Trade in Option Market 💲🤑💲💸💰#We Make Only Profit. #HDFCBANK #BANKNIFTY #NIFTY50 #NIFTY #SENSEX #TATA Technical analysis and options trading can go hand in hand. Many of the best practices for options trading come directly from technical analysis concepts. Technical analysis focuses on price. Fundamental analysis does not solely focus on price. what is option ? Options are a type of derivative product that allow investors to speculate on or hedge against the volatility of an underlying stock. Options are divided into call options, which allow buyers to profit if the price of the stock increases, and put options, in which the buyer profits if the price of the stock declines. RBI Forex Reserve Grow is this Good or Bad ? 1st 140 Billion loss hua hai or ab 20 Billion Grow hua hai to hai to abi bhi loss mai Gover..t abi losss mai hai laken wo Backup bhi ready kr rhe hai take 2023 kese wjh se krab bhi jaye to economy pe zada Farak na pade..
NSE:HDFCBANKEducation
by ISL-TREND
5
Part 1: Equity Derivatives - A Beginner's GuideWhat are derivatives? Basic interpretation : something which is based on another source. A derivative is a contract or product whose value derives from the value of the base asset. The base asset is called the underlying asset. i.e., Sugar prices will rise if sugarcane prices increase due to low production. It means sugarcane is the underlying asset of sugar because the value of sugar is associated with sugarcane. There is a broad range of underlying assets: Metals: lead, gold, silver, copper, zinc, nickel, tin, etc. Energy: coal, natural gas, etc. Agri commodities: corn, cotton, pulses, wheat, sugar, etc. Financial assets: Stocks, bonds, forex, etc. There are two types of derivatives: 1. Exchange-traded: A standardized derivative contract, listed and traded on an organized exchange. 2. Over-the-counter/off-exchange trading/pink sheet trading: A derivative product in which counterparties buy or sell a contract or product at a negotiated price without exchange Instruments of derivatives market: There are four instruments in the derivatives market: 1. Forward: Forward is a non-standard agreement or agreement between two parties that allows you to buy/sell the asset at the agreed price for a pre-decided date of the contract. Forwards are negotiated between two pirates, so the terms and conditions of the contract are customized. These are called over-the-counter(OTC). 2. Future: Future contracts are similar to forwarding contracts, but the deal is made through an organized and regulated exchange rather than negotiated between two counterparties. A futures contract is an exchange-traded forward contract. 3. Options: A derivative contract that gives the right but not the obligation, to buy or sell an underlying asset at a stated strike price on or before a specified date. Buyers of options- Pays the premium and buys the right Sellers of options - Receives the premium with the obligation to buy/sell underlying assets. 4. Swap: A swap is a derivative contract between two counterparties to exchange for the cash flows or liabilities from two different financial instruments. It is an introduction article. I will cover all these topics in detail. Swap helps participants manage risk associated with volatility risk interest rate, currency exchange rates, & commodity prices. Index: Index = Portfolio of securities An Index shows how investors experience the economy. Is it progressing or not? A Stock market index gathers data from a variety of companies of industries. The data forms an overall picture and helps investors compare market performance through past and current prices. Financial indices represent the price movement of bonds, shares, Treasury Bills, etc. Importance of Index: 1. An index is an indication of a specific sector or gross market. 2. It helps investors to pick the right stock 3. An index is a statistical indicator. It represents an overall change or part of a change in the economy. 4. In OTC & exchange-traded markets, It used as an underlying asset for derivatives trading 5. An index helps to measure for evaluation of portfolio performance. 6. Portfolio managers use indices as investment benchmarks. 7. Index illustrates investor sentiments. Types of index: There are four classifications for indices: Equal Weighted Index: Each company is given the same weightage in the composition of this index. Equal-weighted indexes are more diversified than market capitalization-weighted indexes. This index focuses on value investing. Free-float index: In finance, equity divides into different among various stakeholders like promoters, institutions, corporates, individuals, etc. A tradable stake for trading is called a free-float share. i.g, If XYZ company has issued 5 lakh shares with the face value of Rs 10, but of these, 2 lakh shares are owned by the promoter, then the free-float market capitalization is Rs 30 lakh. Free-float market capitalization: Free-floating shares * Price of shares Index: BSE SENSEX Market capitalization-weighted index: In this index, each stock is given weightage according to its market capitalization. High market cap = High weightage Low market cap = low weightage Market Cap= Current market price * total number of outstanding shares i. e, if XYZ company has 1,000,000 outstanding shares and a market price of 55 rs per share will have a market capitalization of 55,000,000. Index: Nifty 50 Price Weighted Index: High price = More weightage Low price = Low weightage Popular price-weighted index: Dow Jones industrial average & Nikkei 225 I will upload second part soon. Thank you :) Money_Dictators
NSE:NIFTYEducation
by Money_Dictators
12
CHOOSING OPTIONS STRIKEChoosing wrong strike prices can lead to big losses even when our analysis is right. It's due to Theta decay. So Lets understand some basics of options strike price. There are three types of strike prices based on their moneyness. 1)ATM (At the Money) 2)OTM (Out of the Money) 3)ITM (In the Money) FOR CALL OPTIONS : Lets assume Stock ABC is trading at 150 (spot price). Then, Spot price = 150 ATM Strike = 150 Any strike above spot price is OTM for call option. Ex : 160 ,170,180 etc., Any strike below spot price is ITM for call option. Ex : 140, 130, 120 etc., FOR PUT OPTIONS : Stock ABC is trading at 150 (spot price). Spot price = 150 ATM Strike = 150 Any strike above spot price is ITM for put option. Ex : 160 ,170,180 etc., Any strike below spot price is OTM for put option. Ex : 140, 130, 120 etc., HOW TO CHOOSE THE STRIKE AMONG THE ABOVE THREE MONEYNESS 1)Follow a simple rule, Buy a strike price which is closer to the spot price. "OTM STRIKES ARE BIG NO" . 2) Remember! when we are buying an option, the stock / index needs to move up / down with a good momentum. So that our option will gain some value & we will be in profit. So it doesn't make sense to buy a OTM call / put. Because if a strike price is far away from spot price, it won't give us much movement due to time decay. I have even shared my option strike rules as follow. Friday, Monday & Tuesday = ATM strikes Wednesday & Thursday = ITM strikes This is how I used to pick strikes for intraday. The reason is simple because, if we are closer to the expiry (Thursday) the effect of theta decay is very high. Due to which our premiums will not move much even if the stock / index has moved pretty well. By following these rules, our chances of losing money will drop drastically. Happy Learning & Earning :) - DivyaaPugal
NSE:RELIANCEEducation
by Divyaapugal
25
How and when should apply which Option's strategyHey everyone! 👋 This post is just for sharing knowledge about Future and Options strategies, First of all, one should build view (bias) on market direction, it may be bullish, bearish, sideways, or there may be some events too, like budget day or quarterly results seasons or may be something else, once view is built then what are the ways to apply futures and options strategies are shown in this post. Options trading may sound risky or complex for beginner investors, and so they often stay away. Some basic strategies using options, can help a novice investor protect their downside and hedge market risk. Options trading is meant to provide a process that defines the selling and buying of options by a trader. The options trading strategies are what make up the options trading. There are various ways that a trader can use the options trading strategies to their advantage. Options trading is a great way to increase your returns as an investor. You will be able to generate profits when the market goes up or when it goes down. However, with so many options trading strategies on offer, you may find it difficult to know which one to choose. This post is showing ideas of the different options strategies and help you choose the right one based on your views. What Are Options Strategies? Options are one of the most flexible and powerful way for investing in the stock markets. Investors can utilize stocks in many ways, including buying and holding onto them to long-term appreciation in value or short-term trading to make a quick buck. However, the stock market is huge, and investors can utilize many sophisticated strategies. The first complex strategy is called a call option. Call options are contracts that enable the holder to purchase a stock or other asset at a specific price within a specific time frame. If the price goes above the strike price, the owner can buy the stock at a lower price and then sell it at a higher price. This can result in a great return, but a loss is possible if the stock doesn't move or move in opposite direction. Types of Options Strategies There are four ways to trade options strategies : call, put, spread, and straddle. First, let's start with the call and put. A call is a contract that gives the owner the right to buy a stock at a specific price on or before the option's expiration date. On the other hand, a put is a contract that gives the owner the right to sell a stock at a specific price on or before the option's expiration date. Spreads and straddles are both strategies used to manage risk. A spread is created by buying the same type of option with the same expiration date but with a different strike price. The strike price is the underlying stock price when the option is exercised. A straddle is created by buying an option with a lower strike price and an option with a higher strike price with the same expiration date. Pros and Cons of Options Strategies Just like selecting a stock to trade or invest in, selecting an options strategy can be a difficult task with risks and potential payouts. The pros and cons of options strategies help you decide which is best for your investing style. Pros: - Lower investment costs​ - Stock options can be used as a way to hedge your investment or portfolio risk Cons: - High risks and losses can occur if you don't research your options strategy​ - Options can only be exercised at the expiration date​ Conclusion Traders can use Options strategies to take advantage of both rising and falling prices of stocks. We hope you have gained a deep understanding of what options strategies are this post. See you all next week. 🙂 RK_Charts Most investors treat trading as a hobby because they have a full-time job doing something else. However, If you treat trading like a business, it will pay you like a business. If you treat like a hobby, hobbies don't pay, they cost you...! Disclaimer. I am not sebi registered analyst. My studies are for educational purpose only. Please Consult your financial advisor before trading or investing.
NSEIX:NIFTY1!Education
by RK_Chaarts
125
WHAT HAPPENED WITH MARUTI? 10000 to 6800 Journey!Maruti reached its 52W high at 10,000 and has been faaling continuously since then. The way Maruti % fell shocked alot of people, However it was not all that difficult to determine the fall and I will share, how I proceeded and made money in Maruti 5.71% . On 25 July, Maruti reached its prior top weeks high zone of 9900-10000 again. It was a good resistance and If it is broken with Good volumes, Maruti can go upto 12K-13K, The next day Maruti reversed from the resistance zone and created a Double Top (as shown in the chart), also the Day Candle formed a Bearish Engulfing Pattern which indicates the start of the downfall. Double Top Pattern is a fairly successful pattern and Share is expected to reach the neckline at 8200-8300 zones before changing its direction. Maruti immediately the next day formed a large 500 points Bearish Candle which gave me good profits, And I continued waiting for my Initial target of 8200 (Neckline). In the meanwhile share gave a lot of green candles, But I since I was already in profits, I had margin of bear some green Candles. Each time Maruti showed a couple of green candle, a Big Red candle wiped out gains forming Bearish Engulfing Pattern repetitively, which posted my confidence. Share reached up to 9000 after that Rose 250 points. I though of squaring off position but the prior experience showed that there has not been 3 consecutive green candles in the past 9 months, So I decided to wait for the next day. Maruti reversed and showed red candles for the next 3 days and formed a 3 Blacks Crows pattern, which is sign of huge fall coming. Near 14 September One Gap Up for formed, but the next day there was a Gap Down thereby forming a Evening Star Pattern. On 19 September, Share finally reached my initial target of 8200 after I squared off and decided to play a LONG STRANGLE, to up my possibilities of winning. I took a Put and a Call at 3% Difference. Soon The share broke the neckline and started to go more downwards, I squared up my call and waited for gains in Put. Every person has different way of Analyzing. But the idea is to hold onto your faith and continue with your strategy. Even the basic Candlestick patterns have the ability to reap you awesome results. Thanks, i hope this is Helpful. Keep sharing the list of shares you want an analysis on. Thanks :)
NSE:MARUTIEducation
by prathamaggarwal
14