How to option trading to share market in hindi

How to option trading to share market in hindi Whether you are a first time investor, a seasoned pro, an "in and out" day trader or a long term investor, Trading Picks will provide you with the necessary strategies you need for maximum profits and success in today's dynamic markets. Short Term Trading. Short term trading will help you catch Short Term Explosive Moves of Indian Stock and Index Futures in both BULL and BEAR markets! Day Trading is a process of capturing Intra-Day Volatility in highly liquid Stock and Index Futures! Capture short-term trends in Commodity Futures traded on both the NCDEX and MCX Commodity Futures Exchanges. Use of this website andor services offered by us indicates your acceptance of our disclaimer. Disclaimer: Futures, option & stock trading is a high risk activity. Any action you choose to take in the markets is totally your own responsibility. TradingPicks. com will not be liable for any, direct or indirect, consequential or incidental damages or loss arising out of the use of this information. This information is neither an offer to sell nor solicitation to buy any of the securities mentioned herein. The writers may or may not be trading in the securities mentioned. All names or products mentioned are trademarks or registered trademarks of their respective owners. Options Basics Tutorial.

Nowadays, many investors' portfolios include investments such as mutual funds, stocks and bonds. But the variety of securities you have at your disposal does not end there. Another type of security, known as options, presents a world of opportunity to sophisticated investors who understand both the practical uses and inherent risks associated with this asset class. The power of options lies in their versatility, and their ability to interact with traditional assets such as individual stocks. They enable you to adapt or adjust your position according to many market situations that may arise. For example, options can be used as an effective hedge against a declining stock market to limit downside losses. Options can be put to use for speculative purposes or to be exceedingly conservative, as you want. Using options is therefore best described as part of a larger method of investing. This functional versatility, however, does not come without its costs. Options are complex securities and can be extremely risky if used improperly. This is why, when trading options with a broker, you'll often come across a disclaimer like the following: Options involve risks and are not suitable for everyone. Option trading can be speculative in nature and carry substantial risk of loss. Only invest with risk capital. Options belong to the larger group of securities known as derivatives.

This word has come to be associated with excessive risk taking and having the ability crash economies. That perception, however, is broadly overblown. All “derivative” means is that its price is dependent on, or derived from the price of something else. Put this way, wine is a derivative of grapes ketchup is a derivative of tomatoes. Options are derivatives of financial securities – their value depends on the price of some other asset. That is all derivative means, and there are many different types of securities that fall under the name derivatives, including futures, forwards, swaps (of which there are many types), and mortgage backed securities. In the 2008 crisis, it was mortgage backed securities and a particular type of swap that caused trouble. Options were largely blameless. (See also: 10 Options Strategies To Know .) Properly knowing how options work, and how to use them appropriately can give you a real advantage in the market. If the speculative nature of options doesn't fit your style, no problem – you can use options without speculating. Even if you decide never to use options, however, it is important to understand how companies that you are investing in use them.

Whether it is to hedge the risk of foreign-exchange transactions or to give employees ownership in the form of stock options, most multi-nationals today use options in some form or another. This tutorial will introduce you to the fundamentals of options. Keep in mind that most options traders have many years of experience, so don't expect to be an expert immediately after reading this tutorial. If you aren't familiar with how the stock market works, you might want to check out the Stock Basics tutorial first. How to option trading to share market in hindi Enriching Investors Since 1998. Profitable Trading Solutions for the Intelligent Investor. Beginners Guide to Options. What is an option? An option is a contract giving the buyer the right, but not the obligation, to buy or sell an underlying asset (a stock or index) at a specific price on or before a certain date. An option is a derivative. That is, its value is derived from something else. In the case of a stock option, its value is based on the underlying stock (equity). In the case of an index option, its value is based on the underlying index (equity).

· Listed Options are securities, just like stocks. · Options trade like stocks, with buyers making bids and sellers making offers. · Options are actively traded in a listed market, just like stocks. They can be bought and sold just like any other security. · Options are derivatives, unlike stocks (i. e, options derive their value from something else, the underlying security). · Options have expiration dates, while stocks do not. · There is not a fixed number of options, as there are with stock shares available. · Stockowners have a share of the company, with voting and dividend rights. Options convey no such rights. Some people remain puzzled by options. The truth is that most people have been using options for some time, because option-ality is built into everything from mortgages to auto insurance. In the listed options world, however, their existence is much more clear.

Types Of Expiration. There are two different types of options with respect to expiration. There is a European style option and an American style option. The European style option cannot be exercised until the expiration date. Once an investor has purchased the option, it must be held until expiration. An American style option can be exercised at any time after it is purchased. Today, most stock options which are traded are American style options. And many index options are American style. However, there are many index options which are European style options. An investor should be aware of this when considering the purchase of an index option. An option Premium is the price of the option. It is the price you pay to purchase the option. For example, an XYZ May 30 Call (thus it is an option to buy Company XYZ stock) may have an option premium of Rs.2. The Strike (or Exercise) Price is the price at which the underlying security (in this case, XYZ) can be bought or sold as specified in the option contract. The Expiration Date is the day on which the option is no longer valid and ceases to exist.

The expiration date for all listed stock options in the U. S. is the third Friday of the month (except when it falls on a holiday, in which case it is on Thursday). People who buy options have a Right, and that is the right to Exercise. When an option holder chooses to exercise an option, a process begins to find a writer who is short the same kind of option (i. e., class, strike price and option type). Once found, that writer may be Assigned. There are two types of options - call and put. A call gives the buyer the right, but not the obligation, to buy the underlying instrument. A put gives the buyer the right, but not the obligation, to sell the underlying instrument. The predetermined price upon which the buyer and the seller of an option have agreed is the strike price, also called the exercise price or the striking price. Each option on a underlying instrument shall have multiple strike prices. Call option - underlying instrument price is higher than the strike price. Put option - underlying instrument price is lower than the strike price. Call option - underlying instrument price is lower than the strike price.

Put option - underlying instrument price is higher than the strike price. The underlying price is equivalent to the strike price. Options have finite lives. The expiration day of the option is the last day that the option owner can exercise the option. American options can be exercised any time before the expiration date at the owner's discretion. A class of options is all the puts and calls on a particular underlying instrument. The something that an option gives a person the right to buy or sell is the underlying instrument. In case of index options, the underlying shall be an index like the Sensitive index (Sensex) or S&P CNX NIFTY or individual stocks. An option can be liquidated in three ways A closing buy or sell, abandonment and exercising. Buying and selling of options are the most common methods of liquidation. An option gives the right to buy or sell a underlying instrument at a set price. Options prices are set by the negotiations between buyers and sellers. Prices of options are influenced mainly by the expectations of future prices of the buyers and sellers and the relationship of the option's price with the price of the instrument. The time value of an option is the amount that the premium exceeds the intrinsic value.

Time value = Option premium - intrinsic value. Long Term Investing. Multiply your capital by investing. long term trends. Multi Bagger Stocks. Create wealth for yourself. quickly identifying changes in trends, riding the trend. booking profits at the end of the trend. Capture brief price swings. fast moving trending stocks. intra-day price volatility of the most active stocks in both.

BULLISH & BEARISH Markets. generate a steady stream of daily income. Futures Day Trading. maximum profits everyday. highly liquid futures contract. • Use of this website andor products & services offered by us indicates your acceptance of our disclaimer. • Disclaimer: Futures, option & stock trading is a high risk activity. Any action you choose to take in the markets is totally your own responsibility. TradersEdgeIndia. com will not be liable for any, direct or indirect, consequential or incidental damages or loss arising out of the use of this information. This information is neither an offer to sell nor solicitation to buy any of the securities mentioned herein. The writers may or may not be trading in the securities mentioned. • All names or products mentioned are trademarks or registered trademarks of their respective owners. Share Market in Hindi आईये जानें शेयर बाजार को Share Market in Hindi शेयर बाजार या शेयर मार्किट में पैसा बनाना बहुत आसान है उसी प्रकार शेयर बाजार में पैसा खोना भी बहुत आसान है। इससे बचा जा सकता है अगर आप स्वंय शेयर बाजार के बारे में अधिक से अधिक जानकारी एकत्र करें,शोध करें और दूसरों के दिये टिप्स पर न जायें। शेयर बाजार में निवेश करने से पहले जान लें यह पहलु जिनसे आपको पता चले कि कैसे करें कमाई और कैसे बचें रिस्क से. शेयर बाजार एक खतरनाक खेल है, इसमें कूदने से पहले इसके बारे में अधिक से अधिक जानकारी ले लेना बहुत आवश्यक है। मगर इसका मतलब यह बिलकुल नहीं है कि शेयर मार्किट में निवेश करने के लिए कोई अलग तरह की प्रतिभा या योग्यता ही चाहिए. कोई भी कोशिश करके शेयर बाजार की जानकारी ले सकता है. आसान हिंदी में शेयर मार्किट की जानकारी मिलना कठिन होता है. शेयर मार्किट की जानकारी केवल कुछ लोगों तक ही सिमित क्यों रहे?

यहां आपको कोई विशेष शेयरों के बारे में मैं टिप्स नहीं देने वाला हूं मगर आपको शेयर बाजार के तकनीकी पहलुओं से हिंदी में अवगत करने की कोशिश करुंगा। शेयर बाजार के अलावा मैं आपको यहाँ हिंदी में बताऊंगा बीमा, निवेश और म्यूच्यूअल फण्ड के बारे में भी. इसके आलावा जानिये टैक्स बचाने के तरीके. साथ ही पैसा बचाने के तरीके और फाइनेंस जगत की तमाम छोटी बड़ी जानकारियाँ हिंदी में. यह ब्लाग होगा डम्मीस के लिये। यहां जानिये कैसे आप इन्फोसिस, रिलायन्स या एयरटेल में हिस्सेदार बन सकते हैं। क्या होते हैं राईट और बोनस शेयर। कैसे पढ़ें कंपनियों के तिमाही, छमाही और वार्षिक नतीजे। क्या होता है EPS और क्या होता है PE रेश्यो और इसका शेयर की कीमत पर क्या असर होता है। साथ ही जानिये कि किस तरह निवेश को डाइवर्सिफाई करके निवेश के रिस्क को कम किया जा सकता है. निवेश के लिए कंपनी कैसे चुन सकते हैं. किस तरीके से निवेश को डाइवर्सिफाई कर सकते हैं. लार्ज कैप, मिड कैप और स्माल कैप कम्पनियों में निवेश का क्या नजरिया होना चाहिए. हेजिंग क्या है और इससे शेयर बाजार में निवेश के रिस्क को कैसे कम किया जाता है. फ्यूचर और ऑप्शन्स क्या हैं यह भी समझने की कोशिश करेंगे. तो पढ़िए Share Market in Hindi और तैयार हो जाइये अमीर बनने के लिये……….। Share Bazar Tips. SIP में निवेश से एक करोड़ कैसे बनायें SIP Investment यानि SIP में निवेश आपको &hellip नये इनकम टैक्स रेट New Income Tax Rates इनकम टैक्स स्लैब फाइनेंशियल साल यानि वित्त &hellip Types of Mutual Funds in Hindi म्यूचुअल फण्डों के प्रकार म्यूचुअल फण्ड कहाँ और &hellip शेयर बाजार क्या है और शेयर बाजार कैसे काम करता है, शेयर कैसे खरीदें हिंदी &hellip हिंदी में How to Buy Mutual Funds म्यूचुअल फंड्स कैसे खरीदें और म्यूचुअल फंड्स में &hellip शेयर क्या होते हैं Share in Hindi. शेयर का अर्थ है अंश यानी हिस्सा यदि &hellip पैसा बचाने के तरीके कैसे बचाएं पैसे छोटी छोटी आदतें बदल कर. शेयर बाजार अथवा &hellip Mutual Fund in Hindi म्यूचुअल फंड क्या है, आइये आज हिंदी में जानते हैं. यह &hellip Share Bazar Tips in Hindi शेयर बाजार टिप्स शेयर बाजार में शुरुआत कैसे करें और &hellip शेयर बाजार में निवेश Investment in Shares in Hindi यदि आपको शेयर बाजार के बारे &hellip EARN INTRADAY IN COMMODITYSTOCK MARKET. 100 % Safe all MCX Tips & Nifty Future option Tips. Call us 097543-81469 for free Trial. Friday, 26 April 2013. FUTURE & OPTION IN STOCK MARKET - NSE HINDI. A very good blog post, I have book marked this internet site so ideally I’ll.

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I am thankful, Your Blog Design Perfect Report and Level Too Thanks By CapitalHeight Investment Adviser. Chapter 2.5: What is Options Trading? An ‘Option’ is a type of security that can be bought or sold at a specified price within a specified period of time, in exchange for a non-refundable upfront deposit. An options contract offers the buyer the right to buy, not the obligation to buy at the specified price or date. Options are a type of derivative product. The right to sell a security is called a ‘Put Option’, while the right to buy is called the ‘Call Option’. Leverage: Options help you profit from changes in share prices without putting down the full price of the share. You get control over the shares without buying them outright. Hedging : They can also be used to protect yourself from fluctuations in the price of a share and letting you buy or sell the shares at a pre-determined price for a specified period of time. Though they have their advantages, trading in options is more complex than trading in regular shares. It calls for a good understanding of trading and investment practices as well as constant monitoring of market fluctuations to protect against losses. Just as futures contracts minimize risks for buyers by setting a pre-determined future price for an underlying asset, options contracts do the same however, without the obligation to buy that exists in a futures contract. The seller of an options contract is called the ‘options writer’.

Unlike the buyer in an options contract, the seller has no rights and must sell the assets at the agreed price if the buyer chooses to execute the options contract on or before the agreed date, in exchange for an upfront payment from the buyer. There is no physical exchange of documents at the time of entering into an options contract. The transactions are merely recorded in the stock exchange through which they are routed. When you are trading in the derivatives segment, you will come across many terms that may seem alien. Here are some Options-related jargons you should know about. Premium: The upfront payment made by the buyer to the seller to enjoy the privileges of an option contract. Strike Price Exercise Price: The pre-decided price at which the asset can be bought or sold. Strike Price Intervals: These are the different strike prices at which an options contract can be traded. These are determined by the exchange on which the assets are traded. There are typically at least 11 strike prices declared for every type of option in a given month - 5 prices above the spot price, 5prices below the spot price and one price equivalent to the spot price. Following strike parameter is currently applicable for options contracts on all individual securities in NSE Derivative segment: The strike price interval would be: At the money - Out of the money. may be enabled intraday in. Strike Price Intervals for Nifty Index. The number of contracts provided in options on index is based on the range in previous day’s closing value of the underlying index and applicable as per the following table: A future date on or before which the options contract can be executed. Options contracts have three different durations you can pick from: Near month (1 month) Middle Month (2 months) Far Month (3 months) *Please note that long terms options are available for Nifty index.

Futures & Options contracts typically expire on the last Thursday of the respective months, post which they are considered void. American and European Options: Please note that in Indian market only European type of options are available for trading. E. g. options contracts for Reliance Industries have a lot size of 250 shares per contract. Let us understand with an example: If trader A buys 100 Nifty options from trader B where, both traders A and B are entering the market for the first time, the open interest would be 100 futures or two contract. The next day, Trader A sells her contract to Trader C. This does not change the open interest, as a reduction in A’s open position is offset by an increase in C’s open position for this particular asset. Now, if trader A buys 100 more Nifty Futures from another trader D, the open interest in the Nifty Futures contract would become 200 futures or 4contracts. As described earlier, options are of two types, the ‘Call Option’ and the ‘Put Option’. Similarly, if the price of the stock rises during the contract period, the seller only loses the premium amount and does not suffer a loss of the entire price of the asset. Put options are abbreviated as ‘P’ in online quotes. Understanding Options contracts with examples: This means, under this contract, Rajesh has the rights to buy one lot of 100 Infosys shares at Rs 3000 per share any time between now and the month of May. He paid a premium of Rs 250 per share. He thus pays a total amount of Rs 25,000 to enjoy this right to sell. Now, suppose the share price of Infosys rises over Rs 3,000 to Rs 3200, Rajesh can consider exercising the option and buying at Rs 3,000 per share.

He would be saving Rs 200 per share this can be considered a tentative profit. However, he still makes a notional net loss of Rs 50 per share once you take the premium amount into consideration. For this reason, Rajesh may choose to actually exercise the option once the share price crosses Rs 3,250 levels. Otherwise, he can choose to let the option expire without being exercised. Rajesh believes that the shares of Company X are currently overpriced and bets on them falling in the next few months. Since he wants to secure his position, he takes a put option on the shares of Company X. Here are the quotes for Stock X: Rajesh buys 1000 shares of Company X Put at a strike price of 1070 and pays. Rs 30 per share as premium. His total premium paid is Rs 30,000. If the spot price for Company X falls below the Put option Rajesh bought, say to Rs 1020 Rajesh can safeguard his money by choosing to sell the put option. He will make Rs 50 per share (Rs 1070 minus Rs 1020) on the trade, making a net profit of Rs 20,000 (Rs 50 x 1000 shares – Rs 30,000 paid as premium).

Alternately, if the spot price for Company X rises higher than the Put option, say Rs 1080 he would be at a loss if he decided to exercise the put option at Rs 1070. So, he will choose, in this case, to not exercise the put option. In the process, he only loses Rs 30,000 – the premium amount this is much lower than if he had exercised his option. How are Options contracts priced? We saw that options can be bought for an underlying asset at a fraction of the actual price of the asset in the spot market by paying an upfront premium. The amount paid as a premium to the seller is the price of entering an options contract. To understand how this premium amount is arrived at, we first need to understand some basic terms like In-The-Money, Out-Of-The-Money and At-The-Money. Let’s take a look as you may be faced with any one of these scenarios while trading in options: In-the-money: You will profit by exercising the option. Out-of-the-money: You will make no money by exercising the option. At-the-money: A no-profit, no-loss scenario if you choose to exercise the option. A Call Option is ‘In-the-money’ when the spot price of the asset is higher than the strike price. Conversely, a Put Option is ‘In-the-money’ when the spot price of the asset is lower than the strike price. How is Premium Pricing arrived at : The price of an Option Premium is controlled by two factors – intrinsic value and time value of the option.

Intrinsic Value is the difference between the cash market spot price and the strike price of an option. It can either be positive (if you are in-the-money) or zero (if you are either at-the-money or out-of-the-money). An asset cannot have negative Intrinsic Value. Time Value basically puts a premium on the time left to exercise an options contract. This means if the time left between the current date and the expiration date of Contract A is longer than that of Contract B, Contract A has higher Time Value. This is because contracts with longer expiration periods give the holder more flexibility on when to exercise their option. This longer time window lowers the risk for the contract holder and prevents them from landing in a tight spot. At the beginning of a contract period, the time value of the contract is high. If the option remains in-the-money, the option price for it will be high. If the option goes out-of-money or stays at-the-money this affects its intrinsic value, which becomes zero.

In such a case, only the time value of the contract is considered and the option price goes down. As the expiration date of the contract approaches, the time value of the contract falls, negatively affecting the option price. In this section, we understood the basics of Options contracts. In the next part, we go into details about Call options and Put options. Click here. Snapshot of profitloss Reflects performance of your portfolio Helps compute taxes. Investment Knowledge Bank. Trading Tools & Research Reports. Account Types & Value Added Services. 1800 209 9191 1800 222 299 1800 209 9292.

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SEBI Registration No: NSE INBINFINE 230808130, BSE INB 010808153INF 011133230, MSE INE 260808130INB 260808135INF 260808135, AMFI ARN 0164, PMS INP000000258 and Research Analyst INH000000586. The Options & Futures Guide. Learn option trading and you can profit from any market condition. Understand how to trade the options market using the wide range of option strategies. Discover new trading opportunities and the various ways of diversifying your investment portfolio with commodity and financial futures. To help you along in your path towards understanding the complex world of financial derivatives, we offer a comprehensive futures and options trading education resource that includes detailed tutorials, tips and advice right here at The Options Guide . Profit graphs are visual representations of the possible outcomes of options strategies. Profit or loss are graphed on the vertical axis while the underlying stock price on expiration date is graphed on the horizontal axis. Before you begin trading options, you should know what exactly is a stock option and understand the two basic types of option contracts - puts and calls. Learn how they work and how to trade them for profits. Read more. Binary Option Basics: Binary option trading is quickly gaining popularity since their introduction in 2008.

Check out our complete guide to trading binary options. Read more. The covered call is a popular option trading method that enables a stockholder to earn additional income by selling calls against a holding of his stock. Read more. Buying straddles is a great way to play earnings. Many a times, stock price gap up or down following the quarterly earnings report but often, the direction of the movement can be unpredictable. For instance, a sell off can occur even though the earnings report is good if investors had expected great results. Read more. Stock Option Trading Basics: For the short to medium term investor, stock option investing provide an additional suite of investment options to let him make better use of his investment capital. Read more. When trading options, you will come across the use of certain greek alphabets such as delta or gamma when describing risks associated with various options positions. They are known as "the greeks".

Read more. Option Trading Advice: Many options traders tend to overlook the effects of commission charges on their overall profit or loss. It's easy to forget about the lowly $15 commission fee when every profitable trade nets you $500 or more. Heck, it's only 3% right. Read more. Stock Options Advice: Cash dividends issued by stocks have big impact on their option prices. This is because the underlying stock price is expected to drop by the dividend amount on the ex-dividend date. Read more. Learn about the put call ratio, the way it is derived and how it can be used as a contrarian indicator. Read more. Another way to play the futures market is via options on futures. Using options to trade futures offer additional leverage and open up more trading opportunities for the seasoned trader. Read more. Day trading options can be a successful, profitable method but there are a couple of things you need to know before you use start using options for day trading.

Read more. Stock Options Tutorial: If you are very bullish on a particular stock for the long term and is looking to purchase the stock but feels that it is slightly overvalued at the moment, then you may want to consider writing put options on the stock as a means to acquire it at a discount. Read more. Stock Options Advice: To achieve higher returns in the stock market, besides doing more homework on the companies you wish to buy, it is often necessary to take on higher risk. A most common way to do that is to buy stocks on margin. Read more. Stock Option Tutorial: Some stocks pay generous dividends every quarter. You qualify for the dividend if you are holding on the shares before the ex-dividend date. Read more. Follow Us on Facebook to Get Daily Strategies & Tips! Futures Basics. Bearish Strategies. Synthetic Positions. Risk Warning: Stocks, futures and binary options trading discussed on this website can be considered High-Risk Trading Operations and their execution can be very risky and may result in significant losses or even in a total loss of all funds on your account.

You should not risk more than you afford to lose. Before deciding to trade, you need to ensure that you understand the risks involved taking into account your investment objectives and level of experience. Information on this website is provided strictly for informational and educational purposes only and is not intended as a trading recommendation service. TheOptionsGuide. com shall not be liable for any errors, omissions, or delays in the content, or for any actions taken in reliance thereon. The financial products offered by the company carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose. Options Trading In Indian Market. Top 10 Beginner’s Question on Options? How to learn trading options? NIFTY Weekly price action analysis – 14-October-2011. Browse by Tags. Top 10 Beginner’s Question on Options?

An valid tradable instrument, the holder of which has the right, but no obligation to buy or sell the stock or underlying instrument. Generally the buyer will pay some price to get this right (called premium). The seller of option will have OBLIGATION to buy or sell the underlying stockinstrument, if the owner of option decides to exercise their right. 2. What are the specifics of an option? An option is made up of following. - Underlying stock or other instrument. - Option type as CALL or PUT. The different combination of above 4 parameters gives us a unique tradable option chain. eg – NIFTY 5200 CALL 26-Apr-2012. An option that gives you the RIGHT to BUY the underlying stockinstrument at agreed price (called strike price), before agreed date (called expiry date). The person who is selling you the CALL option carries the obligation to deliver you the stockinstrument, if you decide to exercise your right.

An option that gives you the RIGHT to SELL the underlying stockinstrument at agreed price (called strike price), before agreed date (called expiry date). The person who is selling you the PUT option carries the obligation to take the delivery from you of stockinstrument, if you decide to exercise your right. 5. What are the two considerations in determining the value of an Option? The value of option is determined mainly by the volatility of the underlying instrument and the distance of option expiry date from today i. e.life of option. More volatile the instrument, or longer the life, costlier the options will be. 6. What are the 3 instruments for trading? The underlying stock, CALL options on the underlying stock and PUT options on the underlying stock are the three types of instrument for trading. 7. What are the 6 actions that can be taken? One each of the above 3 instruments, one can take BUY or SELL actions e. g. – Buy stock, Sell stocks, Buy Call option, Sell Call option etc. That gives us overall 6 types of actions. An option chain is unique combination of 4 parameters given in question 2 above. Each combination is a tradable instrument on its own. eg Nifty 5200 CALL 26-Apr-2012 ang NIFTY 5300 PUT 26-Apr-2012. 9. I have small account size.

Can I trade options and make big returns ? Chances of this happening is very close to zero. Due to small account size, you might end up taking big risk as %age of the account with options. Options are traded in lot size (i. e. minimum quantity for buy or sell), hence the risk will always be in multiple of that lot size. If you trade stocks, this minimum quantity is 1 hence you have much better control on the risk. It is true that %age return can be large in option trade but this can also hit adversely as risk is also high %age term. My suggestion will be to learn the basics of trading first. If account is small then, use stocks for this learning. Once you have consistent and profitable performance, then move into options trading. That too with appropriate account size.

10. How where to learn option trading? Please go through this post “How to learn options trading” where I have given my suggestions on how to get started in options trading. In case of any questions, feel free to leave comment or contact me. How to learn trading options? I get many requests from readers who want to start trading in Options, but lost about the path to take. In this post, I am suggesting a possible direction that should help any new option trader to get establish solid foundation for their trading. 1) To make money in any trading (be it a stock, futures, options or anything), very first thing to know is the direction of the market. Can you make money by buying something, when market is falling ? So very first thing you need to learn is to identify the current trend of the market (up, down or sideway). Better you are in deciding the trend, stronger is your foundation. E. g. – If you are in Nagpur and want to go to Delhi, then first thing u have to do is to be on platform where Northbound trains are arriving. 2) Once you know the direction of market instrument that you want to trade, then choose appropriate option method for this. There are options strategies for each type of market conditions offering different return-risk profile that may suit you. 3) There 6 basic risk graphs in core option and stock method.

All other method is just combination of these 6 basics. These core risk graphs are for – Buy Stock, Sell stock, Buy Call, Sell Call, Buy Put and Sell Put position. Spend as much time as required to understand them on parameters I am going to mention in next point. 4) For any method (including the 6 basic ones), know. How they are constructed What is max risk, What is max reward, Where is BREAK-EVEN point, How the risk graph looks like at expiry, What are suitable market condition favourable for these strategies. Once, you should are in a position to draw risk graph without any option analysis tool, then you pass out of this stage. 5) Understand the concept of option pricing, intrinsic value and time value and the factors that affect option premium. Focus not just on the theory, but also on how changes in those factors will affect the premium. Watch them in real life, experiment with them using option calculator, take notes and track them over next few days using real market data. 6) At advance stage, you can look at transition of risk graph from now to final stage at expiry, various option Greeks etc., various strategies that are combination of 6 core strategies. This is the stage, I will advise one to start using a tool.

IMO, A professional doesn’t become handicap without a tool. Heshe knows how to work without tools. But when they are given the tools, then their performance and efficiency zooms. They know what they are doing, or what they want to do because they have solid foundation. IMO, a great tool in the hand of a monkey is no different from a banana or a stone in its hand. But give a great tool a professional, and see the difference. There are different approach to cover above points (read books, take mentorship from experienced and successful trader, play in market and learn the hard way, go-to schoolcollage etc). The decision is yours. But be careful about selecting the place or option that you are going for. If you read wrong book, go to wrong person for training or do wrong course, you might end up just wasting your resources (time, money, energy etc.). This is just to give base in option trading, so that you can plan an option trader properly. Remember, that doesn’t make you a trader still. Trading involves Money management, developing right trading psychology, risk management, developing suitable trading system etc.

All those areas are beyond the scope of this post but please don’t ignore them. Last but not the least, there is no single defined path that you need to follow to get started in options trading e. g.first trade stocks, then futures, then options. If it is done appropriately, then you can start directly in options, without getting into stocks etc. If you know stock trading (better if you have profitable track record in stock trading), then few initial steps are not required. But that is not limitation, even if you have never traded stocks. As long as you learn to read market trend, you can start with options trading. There are many good resources available on internet to learn about Options. Some of them are:- 1) Learning Center section on cboe. com. 3) NSE site *Home > NCFM > NCFM Modules” section and check out the study material on following modules. - Equity Derivatives: A Beginner’s Module. - Derivatives Market (Dealers) Module. - Options Trading Strategies Module. NIFTY Weekly price action analysis – 14-October-2011.

Here is the Nifty weekly chart with trend lines, trend channel and swing points marked on it. Nifty weekly price action based analysis. Let’s take a look at NIFTY’s weekly chart and do the analysis based on facts shown by price action- 1) We have got a new pivot low confirmed at 4730. 2) Strong bullish bar with close at upper end. 3) Increase in volume with bullish price action. 1) Price is still below the crucial resistance level of 5180 5200. 2) Long term price trend channel is still pointing down. Interpretation and possibilities for next week - As a trader, we have to be prepared to face anything that market throws on us. So lets see what might come in next week. 1) Nearest supply zone of 5200 level to be watched closely in next week. Market has still not tested this level yet. 2) Possible support of 4720 level has worked in this week and gave us nice bounce. It resulted in Hammer candle. I would like to see higher volume and close in top 10% for a hammer. As expected, we got higher volume this week and strong bullish candle closing in top 10%. This indicates the strength of 4720 support level. 3) Volume has increased this week.

My view of short term accumulation by smart-money is turning out to be correct as prices are moving up with strong candle. It is still not bullish move but in a sideway range with short term bullish bias. 4) Lower swing low at 5200 level is still not broken. As this level is below the long term bullish trend line from March-2009 low, it confirms that the trend line is broken. In other words the Bull market that started from March-2009 low is over. The long term direction of market is down and the deciding trend line for this is the down sloping line starting from 6300 high made in Oct-2010. Important levels to watch for – For up-move – 5150, 5200, For down-move – 4880, 4720. For sideway – 4880, 5150.. Hope this analysis helps you in forming your own views on market. Feel free to drop your comments on the post. Let me know if you would like to see something more in the analysis. Disclaimer – These are my views on the market and I could be wrong in reading it. Please use your own judgment and make sensible trading decision based on your own analysis.

NIFTY Weekly price action analysis – 07-October-2011. Here is the Nifty weekly chart with trend lines, trend channel and swing points marked on it. Nifty weekly price action analysis. Let’s take a look at NIFTY’s weekly chart and do the analysis based on facts shown by price action- 1) There was large pullback from the low of 4720 and bar closed marginally in green. 2) Hammer candle is formed, though not very strong as the weekly close is roughly 20% of range below the high. For strength of hammer, I would like to see the close being in top 10% range. 1) This week has given lower high and lower low too. Hence down trend continues. 2) Volume this week has been lower then previous 4 weeks. The low volume gives me doubt on strength of hammer candle. Lets see what happens in next week. Interpretation and possibilities for next week - As a trader, we have to be prepared to face anything that market throws on us. So lets see what might come in next week. 1) Nearest supply zone of 49505170 level worked last week and it also hold as resistance during this week too. As anticipated last week that 5000 levels will act as new supply zone, it turned out to be true this week when price struggled to stay above 5000 and finally dropped and closed below this. 2) Possible support of 4720 level has worked in this week and gave us nice bounce.

It resulted in Hammer candle. I would like to see higher volume and close in top 10% for a hammer. Hence would like to wait for next weeks action to tell me more about it. 3) Volume has been lowest of last 5 weeks. I would like to watch it closely during next week for break or support of 4720 level. Else my view of short term accumulation by smart-money will be supported. My tracking of FII flows also giving the sign of short term bottom formation. 4) This weeks lower high bar resulted in giving us lower swing low at 5200 level. As this level is below the long term bullish trend line from March-2009 low, it confirms that the trend line is broken. In other words the Bull market that started from March-2009 low is over. The long term direction of market is down and the deciding trend line for this is the down sloping line starting from 6300 high made in Oct-2010. Important levels to watch for – For up-move – 4920, 5000, For down-move – 4720, 4675. For sideway – 4720, 4920.

Hope this analysis helps you in forming your own views on market. Feel free to drop your comments on the post. Let me know if you would like to see something more in the analysis. Disclaimer – These are my views on the market and I could be wrong in reading it. Please use your own judgment and make sensible trading decision based on your own analysis. NIFTY Weekly price action analysis – 30-September-2011. Here is the Nifty weekly chart with trend lines, trend channel and swing points marked on it. NIFTY weekly price action analysis. Let’s take a look at NIFTY’s weekly chart and do the analysis based on facts shown by price action- 1) Weekly close is above previous weeks close. The week has also shown a green candle. 2) Wide range candle closing in middle. 3) Volume has been higher then previous week. 1) Market made lower high and lower low on weekly chart. It also resulted in new lower swing high below the important level of 5200. Interpretation and possibilities for next week - As a trader, we have to be prepared to face anything that market throws on us. So lets see what might come in next week.

1) Nearest supply zone of 51705200 level worked last week and it also hold as resistance during this week too. As anticipated last week that 5000 levels will act as new supply zone, it turned out to be true this week when price struggled to stay above 5000 and finally dropped and closed below this. 2) Possible support is at 4720 level. Any break of this, can easily take market to 4550 level on downside. 3) Volume has been fairly high during this week indicating active participation by smart money. I would like to watch it closely during next week for break or support of 4720 level. Else my view of short term accumulation by smart-money will be supported. My tracking of FII flows also giving the sign of short term bottom formation. 4) This weeks lower high bar resulted in giving us lower swing low at 5200 level. As this level is below the long term bullish trend line from March-2009 low, it confirms that the trend line is broken. In other words the Bull market that started from March-2009 low is over. The long term direction of market is down and the deciding trend line for this is the down sloping line starting from 6300 high made in Oct-2010. Important levels to watch for – For up-move – 50005170, For down-move – 4750, 4720.

For sideway – 4750 to 5030. Hope this analysis helps you in forming your own views on market. Feel free to drop your comments on the post. Let me know if you would like to see something more in the analysis. Disclaimer – These are my views on the market and I could be wrong in reading it. Please use your own judgment and make sensible trading decision based on your own analysis. Interpreting top 10 open interest – 30-September-2011. As options open interest shows us the footprint of smart moneybig players, so lets try to decipher their footprint. Here is the list of option strikes (October expiry) that have got highest open interest as of Friday’s close. 1) 5000 and 5200 CALLs have seen highest OI in this new series indicating these levels as resistance. 2) 4700 and 4800 PUT have seen highest OI in this new series indicating these levels as good support.

1)4400 PUT had seen trading in the order of 22 lacs OI. This could provide support in event of fall below 4700 level. 2) 4500 PUT do not have higher OI then 4400 or 4600 level hence this psychological level might not be of much use. Hope this analysis helps you in forming your own views on market. Feel free to drop your comments on the post. Let me know if you would like to see something more in the analysis. Disclaimer – These are my views on the market and I could be wrong in reading it. Please use your own judgment and make sensible trading decision based on your own analysis. NIFTY Weekly price action analysis – 23-September-2011. Here is the Nifty weekly chart with trend lines, trend channel and swing points marked on it. NIFTY weekly price action analysis. Let’s take a look at NIFTY’s weekly chart and do the analysis based on facts shown by price action- I am struggling to find bullish reasons on chart once again on this week. Except that the volume in this bearish week are lower then previous week, which show lack of bearish strength. Once again we had bearish week. 1) Price broke above previous NR week, just to indicate that it was false breakout. It the resistance zone 5170 and dropped from there. 2) We have a bearish engulfing candle that has engulfed the bullish price action of last 2 weeks.

It is also wide range candle, indicating strength in bearish move. 3) Volume has been low in this week. It is important to watch the price action and volume as it reaches the previous swing low point 4720. 4) I have marked Green think link on this weeks chart to project the possible downside target for this leg. Of course it will not be straight line move and we will see some intermediate bounces. Possible levels where market might support are green lines at 4700 4550 levels. Interpretation and possibilities for next week - As a trader, we have to be prepared to face anything that market throws on us. So lets see what might come in next week. 1) Nearest supply zone of 51705200 level worked during this week and pushed the market down from here. Market found some support above 5000 which is also broken later. Now 5000 levels will act as new supply zone. 2) Possible support is at 4720 level. Any break of this, can easily take market to 4550 level on downside. 3) Volume has been low during this week indicating that new supply has not yet entered the market. I would like to watch it closely during next week.

Else my view of short term accumulation by smart-money will be supported. My tracking of FII flows also giving the sign of short term bottom formation. Important levels to watch for – For up-move – 51705300, For down-move – 4830, 4720. For sideway – 4830 to 5170. Hope this analysis helps you in forming your own views on market. Feel free to drop your comments on the post. Let me know if you would like to see something more in the analysis. Disclaimer – These are my views on the market and I could be wrong in reading it. Please use your own judgment and make sensible trading decision based on your own analysis. Interpreting top 10 open interest – 23-September-2011. As options open interest shows us the footprint of smart moneybig players, so lets try to decipher their footprint. Here is the list of option strikes (September expiry) that have got highest open interest as of Friday’s close. 1) 4800 and 4900 CALLs have seen good addition in OI making them immediate resistance for current series. 2) 4600 PUT has also shown very good increase in OI making it stronger support level.

3) 4700 PUT has seen drop in OI indicating this level might not provide any support here. 1) We are in the last week of this series hence change in OI could be very fast. As per the highest OI at this stage, 460047004800 are potential support levels. 2) Resistance level is currently built up at 4900 and then at 5000 level. 4) This being last week of current series, the quick look at next month’s OI indicates good build up of CALLs at 520051005000 level and PUTs at 480047004500 levels. Hope this analysis helps you in forming your own views on market. Feel free to drop your comments on the post. Let me know if you would like to see something more in the analysis. Disclaimer – These are my views on the market and I could be wrong in reading it. Please use your own judgment and make sensible trading decision based on your own analysis. Interpreting top 10 open interest – 16-September-2011. As options open interest shows us the footprint of smart moneybig players, so lets try to decipher their footprint.

Here is the list of option strikes (September expiry) that have got highest open interest as of Friday’s close. 1) 5300 CALL have shown good addition in OI making them strong resistance for current series. 5200 CALL OI has gone down, i. e. this level has weaken as resistance. 2) 4900 PUT has also shown very good increase in OI making it stronger support level. 3) 5500 CALLs have shown drop in OI indicating people are booking profit on these calls. 4) Higher volume of Open Interest in CALLs is at 5200 level and then at 5300 level. Highest level of PUTs is at 4700, 4800, 5000 level. 1) As market moved up during this week, support level has shifted up which is indicated by heavy increaes in PUT OI at 49005000 levels. 2) Resistance level is currently built up at 5200 and then at 5400 level. 3) As market moved up, if sentiments are turning bullish then we should have seen more CALLs OI. Unfortunately, that is not the case. This is indication of lack of strength in bullish move.

We have seen increase in PUT OI which is going to provide support during current series, if market falls from here. Hope this analysis helps you in forming your own views on market. Feel free to drop your comments on the post. Let me know if you would like to see something more in the analysis. Disclaimer – These are my views on the market and I could be wrong in reading it. Please use your own judgment and make sensible trading decision based on your own analysis. NIFTY Weekly price action analysis – 16-September-2011. Here is the Nifty weekly chart with trend lines, trend channel and swing points marked on it. Nifty Weekly price action analysis. Let’s take a look at NIFTY’s weekly chart and do the analysis based on facts shown by price action- 1) We had weekly Green bar indicating continuation of bullish move in short term. 2) Weekly volume has been very good supporting the upmove. Friday’s daily volume has been one of the highest in last 20 days. 3) Weekly close is above the psychological level of 5000. 1) The week made Lower High and Lower Low compared to last week, indicating weakness. 2) Previous week with range of 226 points was NR7 week (narrowest range in last 7 weeks).

This weeks range of 232 is also among the narrower range. It indicates that market is still in consolidation phase, but sooner or later, we are going to see range expansion and move. 3) Price has dropped from the previous support level of 5177, which acted as resistance on daily chart. The lower high resulted in giving us Swing High point at 5177 which will act as first resistance going forward. 3) Market closed at more or less same level as previous weeks close indicating lack of strength in trend. Interpretation and possibilities for next week - As a trader, we have to be prepared to face anything that market throws on us. So lets see what might come in next week. 1) Nearest supply zone was around 51775200 level. Market needs to cross this level to show any further sign of strength. Looking at global weakness, it is going to be a challenge. 2) Any break of 5177 level, can easily take market to 5328 level on upside. 3) Volume has been high on last 2 days of the week, indicating that accumulation might be in progress. My tracking of FII flows also giving the sign of short term bottom formation. 4) On first 3 days of this week, market made daily low between 4910 4920 range. Hence this level will act as support or trend decider in days to come.

5) I will not call it as end of bearish trend. This could very well be a bearish rally. We are still in down trend, global markets are still going down. In such situation, it is better to wait for more confirmation before we call it return of bull market. Important levels to watch for – For up-move – 52005300, For down-move – 4800, 4900. For sideway – 4910 to 5150. Hope this analysis helps you in forming your own views on market. Feel free to drop your comments on the post. Let me know if you would like to see something more in the analysis. Disclaimer – These are my views on the market and I could be wrong in reading it. Please use your own judgment and make sensible trading decision based on your own analysis.