Category: Articles

Confused about options strategy? Here are ways to trade the respites or pullbacks

Long positions in single options are recommended because of the very fact that we are taking a trade against the trend and we want to have a known loss strategy and that too minimal Just like digestion is an important fact of human bodily functions, respite/pullbacks are also a critical and important part of the course...

Two ways option trading can help investors stay afloat in choppy market waters

As swimming against the tide is difficult, taking a trade against the trend is also difficult. There is one basic problem one would come across, limiting the draw down of the trade Conviction is a funny thing. The frivolity lies in the fact that it may not necessarily be following the trend. With the behaviour of the ...

Use a combination of options to trade bottom-up reversals confidently

After a reversal move, trade can be initiated with same one higher strike Call but sell not one but two lots of a three steps higher strike Call Trades taken after a confirmation of a trend reversal are more prudent. But more often than not these reversal moves are generally unidirectional. Trading in these situations ...

Top 3 factors to help investors buy or sell an option

If we are in the early part of the expiry be a net Buyer, while towards the end of the expiry be more on the net selling side One of the most widely debated issues in options trading has been what pays off more — net buying of options or net selling. I had an opportunity to sit with a great set of Options traders an...

Options trading: Use ratios to take away hurdles between you and the Direction

Build a ratio spread by buying a higher call/lower put relatively closer to the stock price, and shorting 2 lots of at least 2-3 steps, if not more, of even higher call/lower put We all know that options are one of the finest instruments to trade directions, thanks to their most liked feature of having a non-linear pay...

Decoding the Mystery of Physical Settlement

As per the SEBI guidelines, physical settlement of stock derivatives shall be made mandatory in a phased/calibrated manner. First phase of Physical settlement will commence from July expiry (26th July 2018). List of the stocks that are moved into physical settlement in first phase are Click here How will the Physical s...

Edge of Future over Spot in Options Premium Calculation 

Edge of Future over Spot in Options Premium Calculation   Live example to understand importance of selecting Futures as underlying compare to Spot in Option Calculation INFOSYS  Infy goes ex- dividend on 14th June by Rs30.5 (Rs.20.5 Final +Rs.10 Special). Option premium for Calls were trading higher at 9:20 AM de...

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