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Optionstrading

Unlocking Options Trading : The Power of Demand and Supply Part1The Indian options market has experienced a remarkable growth of nearly 8 times since the pre-COVID era. This surge in volume and transactions has created new opportunities for retail traders and investors. While the NSE initially traded only Nifty and Bank Nifty, it now offers a wider range of indices like Midcap Nifty, Nifty Financial Services, Sensex, and Bankex. Despite increased participation, liquidity remains a concern for some instruments. This article explores how the Demand and Supply strategy can be applied to options trading. I have been personally trading demand and supply strategy for over 13 years and have seen the power of this strategy working for any asset class for that matter be it the Indian markets or even the Global markets. Now the question arises can we use the Demand and Supply strategy for trading options and the plain simple answer is “Absolutely Yes!!”. Today I am going to show how we can combine demand and supply and Options together to gain a superlative edge. Let us basically talk first about what is a demand zone? A demand zone is an area on the price chart where price has significantly moved to the upside creating a footprint of “Strong Buyers” and a supply zone is an area on the price chart where price has moved down significantly creating a footprint of “Strong Sellers”. As you can see in the above chart I have plotted the demand zone(Green) and supply zone(Red). These are the areas on the price chart where one can expect the price to turn. Now if one want to switch gears and trade options what are the options that are available for a trader. a. Upside Movement( Demand Zone) b. Sideways Movement ( Middle of Demand & Supply) c. Downside Movement( Supply Zone) So the trader first needs to identify where the price is in context of the Demand and Supply zones. If the price is closer to Demand one can plan a bullish trade, if price is closer to supply zone one can plan a bearish trade and if prices are in the middle one can plan a sideways trade. As per the above example price is closer to a supply zone on the BNF so it will be more prudent for the trader to setup a trade in Options with a bearish perspective based on the demand and supply strategy. In the world of options there are 2 types : 1. Call Options 2. Put Options Buying Calls gives the right to buy and buying puts give the right to sell however one can even sell options and when one does that he has the obligation to sell in case of calls and obligation to buy in the case of puts For an absolute layman this makes the process of understanding options a lot harder than what options actually are so we are going to breakdown these 4 positions and corelate these 4 positions with demand and supply. As an options trader one can create 4 positions. 1. Buy Call 2. Buy Put 3. Sell Call 4. Sell Put We are going to break down these 4 positions into simple mathematical signs to arrive at a decision that out of the above 4 options strategies which is to be implemented in Demand Zone and which one is to be implemented in a Supply Zone. Let us break down these 4 positions as follows : Buy --> “+” Calls-->“+” Sell --> “-“ Puts -->”-“ 1. Buy Calls => + * + = + Since the outcome is positive, we always implement a positive position at a Demand Zone therefore Buy Call as a strategy should be implemented only at Demand and cannot be implemented at Supply 2. Buy Puts ==> + * - = - Since the outcome is negative, we always implement a negative position at a Supply Zone therefore Buy Put as a strategy should be implemented only at Supply and cannot be implemented at a Demand Zone 3. Sell Calls --> - * + = - Since the outcome is negative, we always implement a negative position at a Supply Zone therefore Sell Call as a strategy should be implemented only at Supply and cannot be implemented at a Demand Zone 4. Sell Puts --> - * - = - Since the outcome is positive, we always implement a positive position at a Demand Zone therefore Sell Put as a strategy should be implemented only at Demand and cannot be implemented at Supply Thus by using simple mathematical signs we have made a complex understanding easy to follow where now a demand and supply trader knows and understand that which are the two strategies he can implement at a Demand Zone and which are the two strategies that can be implemented at a Supply Zone Based on these calculations, we can determine the appropriate options strategies for different price levels: • Demand Zone: Buy Call or Sell Put • Supply Zone: Buy Put or Sell Call I hope you found the previous explanation clear. Now that you understand how to connect demand and supply with options, let's discuss how to determine whether to buy or sell options. Is the Demand and Supply strategy enough or are there other factors to consider?". We will talk about that in Part 2 of Unlocking Options Trading : The Power of Demand and Supply Strategy
NSE:BANKNIFTYEducation
by VishalSubandh
2
Banknifty Trend Report Hello Everyone 👋 Today Bank-Nifty Try to Break High if Bank-nifty Break High so we need to cut our Down position. Give me Some Time Today We upload Some Levels So you Can I Easily Identify Trend. 1.Bullish Shark Harmonic Pattern: The BANK-NIFTY chart currently showcases a Bullish Shark Harmonic Pattern forming within a rising parallel channel. This pattern suggests a potential bullish move, provided that the price holds above the crucial level of 50,149. That level should act as a strict stop loss. 2.Recent Trend: On August 14, there was a trending move. The price consolidated in the morning for a few hours and then started to fall. Currently, the price is at a support level, and it can either move up or continue to fall. The trend direction is still deciding, so keep an eye on it. 3.Long-Term Investment Considerations: If you’re considering long-term investment in the banking sector, consider Bank Nifty ETFs. These exchange-traded funds offer easy diversification and flexibility.
NSE:BANKNIFTYLong
by SkyTradingZone
2
"SEBI's Proposal: A Threat to Small Retail Traders" The Securities and Exchange Board of India (SEBI) has proposed new rules to reduce the high volume of derivatives trading. One of these measures is to increase the minimum trading amount, known as the lot size, to ₹20-30 lakh. This is a concern for small retail traders who make profits, as it will make it difficult for them to trade. However, the same SEBI allowed daily expiries for Nifty options, which has further led to an increase in trading volume. Now, they are proposing to switch back to weekly expiries, which is a good move actually. However, if the lot size is increased, only big players will be able to trade and earn profits, while small retail traders will either have to stop trading or borrow money to trade. But what if most of these traders borrow money and end up making losses again? In that case, this change is not a solution The government claims that these new rules are beneficial for retail traders because many of them are experiencing significant losses. However, I believe this is nonsense. The government previously praised retail traders for participating in the market and even the National Stock Exchange (NSE) considered extending trading hours before. But everyone knows that many retail traders incur losses due to a lack of knowledge about the market and greed. There are numerous social media fake influencers who deceive people by showcasing fabricated profits and promising easy money. These influencers attract individuals who are desperate for an additional source of income due to their low salaries, grueling work hours, or unemployment. These people yearn to earn money quickly without investing excessive time. So Banning influencers who provide false P&L statements : Regulators can take action against influencers who mislead the public by presenting fake trading records, making it difficult for them to continue operating. Implementing a "cooling period" for traders : If a trader consistently incurs losses for six months, their trading account can be temporarily blocked or restricted, giving them time to reassess their investment strategy. Reintroducing traditional expiry methods : reverting back to the old expiration method (instead of daily expiration), the market may become more stable and less prone to excessive trading volumes. By implementing these measures, the government and regulatory bodies can reduce trading volumes in derivatives and protect investors from fraudulent activities. " Finally I respectfully ask SEBI to reconsider their proposal. There are many retail traders who have a good income, but they don't have a lot of money to start with. It's like starting a small business - you usually start with a little money and then gradually add more as the business grows. It would be unfair to require retail traders to start trading with a large amount of money.
NSE:IDEA
by ard-komercisto
Take a look | min 20% return | swingFundamentally good stock, For long term investment. . . Entry: 535 target: 555 -585- 651 sl: 506 major stoploss / support: 485 . Enter only after breaking & close above " Yellow box" mentioned. Or else wait for some time. ' ;good for long term investment. ' ' Don't make complicated trade set-up.📈📉 Keep it " simple, focus on consistency💹 Refer our old ideas for accuracy rate🧑‍💻 Valuable comments are welcomed-✌️ . refer old ideas attached below
NSE:APOLLOTYRELong
by TheNuraTrading
Bank Nifty Update ( Long Term View)Hello Everyone Its been long since my last update, as in current chart i am only going to talk about long term view. I have been talking about up cycles since 23rd january 2023, you can see this in my below chart. Bank Nifty update on 23/01/2024 What now i expect market should move upward making blue degree which is called medium degree(m1 series). By combining this m series, our one long term degree wave-((3)) will completed. Thank You
NSE:BANKNIFTYLong
by Neowave-forecast
1
18 Apr Nifty –13.23 Candle wipes out the entire April ProfitsNifty Analysis - Stance Bearish⬇️ Recap from yesterday: "For bearish continuation, we need to take out the 22051, whereas for Neutral stance shift, we need to take out 22295." We did take out the 22051 support today on the 4mts TF but not before some drama. Initially Nifty was showing strong upside potential knocking the 22295 resistance level. By 12.15, I almost thought we might have to go neutral and kiss good bye to the new Bears. Fortunately, the 22295 resistance held its ground and proved a safe level for the Bears. Coming to the main event of the day - see the encircled portion. The 13.23 and 13.27 candles. Nifty fell 213 points in 8 minutes (might be a new record). And since we had an expiry today, what it actually did was mess up the premiums of straddles. I lost 1.38L in Nifty today due to this misadventure. By 14.55 we lost the 22051 support and N50 went on to test 21961. The next major support comes at 21913. On the higher TF, we wish to maintain the bearish stance even though we did not get a 63mts closing candle below 22051. I am hoping that we may get one in the forenoon session tomorrow. The last 3 candles were strong RED and the bodies fit right between the 22295 and 22051 SR zones. --- The losses in Algo trades were 1.38L, mostly due to slippages between 13.23 to 13.28. However smartly you set the programs, the orders will not fire as fast as the underlying moves. The delay is enough to get mispricings and slippages. Quite relieved to have saved close to 70k from the max loss value.
NSE:NIFTYShort
by viswaram
Banknifty expecting the pause for next 2-3 daysNSE:BANKNIFTY Bank Nifty, we have seen Almost 3200 points One way rally. Without any major pullback. From 45800 To 49000 Now I am expecting a Pullback till 48100 level and then sideways market For 2-3 days. After this range Formation in Market, We might see fresh breakout and then move for next all time high level again. Good to keep on the radar Always respect SL & position sizing =================== Trade Secrets By Pratik =================== Disclaimer SEBI UNREGISTERED This is our personal view and this analysis is only for educational purposes Please consult your advisor before investing or trading You are solely responsible for any decisions you take on basis of our research
NSE:BANKNIFTY
by Trade_Secrets_By_Pratik
3