Options Trading: How to Trade Options, Strategies and Tips
Hello friends, in the last article we have come to know How To Be Successful In Trading…Now let’s talk about what is Option Trading Strategies, so that we can get less loss in option and more profit. Must read this article till the end so that you will know when to buy and sell options.
Things to keep in mind in option trading :-
- Whenever you feel that the price of the underlying (Share) is about to increase, then you have to buy a call option.
- Call option has to be sold whenever it is felt that the price of the underlying (share) will not remain stable or increase further.
- When you feel that the price of the underlying (Share) is about to fall, then you have to buy a put option.
- When it is felt that the price of the underlying (Share) is not about to fall, then you have to sell the put option.
- Option seller has unlimited risk.
- Whenever you feel that the share price will go up, then exercise the call option.
- Whenever you feel that the share price is going down, then exercise the put option.
Benefits of Option Trading :-
- You can earn good profits in the ongoing boom in share or index in less money only.
- Get good leverage for less money.
- You can hedge your portfolio through options, which means you can avoid potential portfolio losses.
- Option works like an insurance the premium protects you portfolio.
What are the disadvantages of option trading?
- There is a very risky derivative in the option, in which there is a fear of loss.
- There is a reason for loss more than getting leverage.
- If the market is not doing according to you, then the premium sinks.
Option Trading Strategies Complete Information:-
In option trading, buy call and put in such a way that even if the market goes up, there is profit and even if the market goes down, there is good profit. For this, some rules have to be followed by which we earn well.
Price of Call Optin and Put Option :-
The price of call and put option should be equal. It means that the call has to be bought for the same price as the put. Only then the investment value will be the same on both sides.
Example- Suppose banknifty is running at 33500, if you can take away 500 rupees from it, both put and call will have to be taken for 34000.
Advantages of Option Trading:-
- You can earn good profits in the ongoing boom in share or index in less money only.
- Get good leverage for less money.
- You can hedge your portfolio through options, which means you can avoid potential portfolio losses.
- Option works like an insurance the premium protects you portfolio.
How to do option trading?
If you want to do option, then for that you have to buy not 1 share but a whole Lot. You buy a full lot of Nifty50, in which there is a lot of 75 shares. Now you have to go to demat account to buy nifty50 or bank nifty option. After this you will get to see the option chain, on which you can buy if you want to buy call or put.
