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Option TradingInvesting Approach by Institutions ✅ Investment Philosophy: Long-term horizon Focus on fundamentals (P/E, ROE, growth) Sector rotation and macro trends ✅ Allocation Strategies: Strategic Asset Allocation (SAA) Tactical Asset Allocation (TAA) Smart Beta and Factor Investing Trading Strategies by Institutions 🔹 High-Frequency Trading (HFT) Executes thousands of trades in milliseconds Relies on arbitrage, price inefficiencies 🔹 Statistical Arbitrage Mean-reversion strategies using historical patterns 🔹 Swing & Trend Trading Use technical indicators like MACD, Moving Averages, RSI
NSE:BANKNIFTYEducation
by SkyTradingZone
2
Option Trading The stock market is a platform where shares of publicly listed companies are bought and sold. It serves two primary functions: providing companies with capital to grow and giving investors the opportunity to share in the profits of publicly traded companies. Key Components: Stocks: Ownership shares in a company. Stock Exchanges: Platforms like the NYSE, NASDAQ, and BSE where trading occurs. Indices: Benchmarks like the S&P 500 or Nifty 50 that track the performance of groups of stocks.
NSE:FINNIFTY1!Education
by SkyTradingZone
8
Learn Institutional Option Trading Part-2Option Greeks in India: Delta: Measures sensitivity to price changes. Theta: Measures time decay. Vega: Measures sensitivity to volatility. Gamma: Measures change in Delta. Indian traders use these Greeks to manage risk and optimize strategies. Risks in Indian Option Trading: Premium Decay: Loss in value as expiry approaches. High Volatility: Can cause sudden losses. Liquidity Risk: Some options have low trading volume. Complexity: Requires deep market knowledge.
NSE:BANKNIFTYEducation
by SkyTradingZone
Learn Institution Trading What is Institutional Option Trading? It refers to large-scale option strategies used by hedge funds, banks, and FIIs to manage risk, hedge portfolios, or create directional bets with high precision. 🔹 Key Institutional Strategies: Buy-Write (Covered Call): Holding stocks and selling calls to earn premium. Protective Put: Buying puts as insurance to hedge stock positions. Multi-leg Spreads (Iron Condor, Butterfly): Neutral strategies to profit from range-bound markets. Put-Call Ratio Analysis (PCR): Gauging market sentiment from institutional flow.
BSE:SENSEXEducation
by SkyTradingZone
7
Advanced Institutions Option Trading - Part 5Institutional Tools & Platforms Bloomberg Terminal / Reuters Eikon: Institutional-grade data FIX Protocols: For high-frequency option order routing Quant Models: Statistical arbitrage using Python/R Option Analytics Engines: Measure IV Skew, Smile, Surface modeling Institutions don’t just trade options—they engineer risk-managed portfolios using AI and predictive analytics. Option Chain Analysis for Traders Option Chain provides a list of all available option contracts for a stock/index. Key Elements: Strike Prices Call & Put Prices Open Interest (OI) Volume Implied Volatility (IV) Change in OI Interpretation: High OI + Rising Price = Strong Trend IV Surge = High Volatility Expectation PCR (Put-Call Ratio) = Market Sentiment Indicator PCR > 1: Bearish sentiment PCR < 1: Bullish sentiment
NSE:HDFCBANKEducation
by SkyTradingZone
3
Option Chain TradingAn option chain is a comprehensive listing of all available option contracts for a specific underlying asset, typically organized by expiration date and strike price. It provides a detailed view of call and put options, their premiums, and other relevant information like bid/ask prices, volume, and open interest. This tool is crucial for options traders to analyze market conditions, identify potential trading opportunities, and choose the right options contracts based on their investment strategy.
NSE:TATAMOTORSEducation
by SkyTradingZone