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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
EASY OPTION TRADING STRATEGY FOR NIFTY INDEX TRADING Key Levels For Day Trading Support Zones For Nifty Intraday Trading on Fiday First Resistance Zone For Nifty – 17284 – 17293 Second Resistance Zone For Nifty – 17220 – 17230 Third Resistance Zone For Nifty – 17165 – 17181 Forth Support Zone For Nifty – 17060 – 17072 Resistance Zones For Nifty Intraday Trading on Fiday First Resistance Zone For Nifty – 17380 – 17370 Second Resistance Zone For Nifty – 17472 – 17458 Third Resistance Zone For Nifty – 17540 – 17528 –
NSE:NIFTYShort
by manojshinde27
BankNifty Daily Levels Update For Option Day Trading Major Support Zones For BankNifty On Expiry  First Support Zone For Nifty –             37523  - 37560 Second Support Zone For Nifty –        37306  - 37345 Third Support Zone For Nifty –          37055  - 37095 Major Resistance  Zones For BankNifty On Tuesday  First Resistance  Zone For Nifty –      ( 37852 - 37827  ) Second Resistance  Zone For Nifty –   ( 38195 - 38165 ) Third Resistance  Zone For Nifty –      ( 38535 - 38495 )
NSE:BANKNIFTY
by manojshinde27
NIFTY TRENDNifty analysis : Two confirmations of shorts 1. TrendLine Rejections with above avg Volumes 2. Rsi Divergence upon follow up - Trade ideas 1. Low Risk - Low Rewards _ High Probabilty (CREDIT SPREADS) TRADE IDEA : SELL 18200 & above calls SEP expiry & BUY HEDGE 2. Low Risk - High Rewards _ (RATIO) TRADE IDEA : SEP - Monthly Expiry BUY ATM 17600PE - 2lots BUY 16400PE - 2lots SELL 16800PE - 4lots POP : 42% \\ Margin Req : 80K \\ Breakeven : 17400 \\ Max Profit @16800 \\ Max Loss above 17600
NSE:NIFTY1!Short
by Devyansh_B
First time doing nifty 50 analysis For nifty 50 = 17630-635 is a level where price rejected multiple times, so if price price gives a breakout at 5 min. chart, one should buy call option. Reasons for continuation- 1. From last two days there is no directonal move so it may 2.Monthly expiry ( I have observed many times that if two or three days before the monthly expiry move is range bound then there is high probability for directional move) If you are a index option buyer then you must try this strategy. This works for me, it will work for you. It gives you huge risk reward as compare to other days becuase the on direction move. Please read & do comment so that I can find more opportunities to improve my self for more good analysis. THANKS
NSE:NIFTYLong
by mahhisingh