OPTION STRATEGY FOR RBI CREDIT POLICY DEC 2019

BUY 1LOT BANKNIFTY 31600 12 DEC PUT @ 123 AND 32400 CALL @ 128

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OPTION STRATEGY; COVERED CALL

Options are excellent tools for both position trading and risk management, but finding the right strategy is a key to using these tools to your advantage. Beginners have several options when choosing a strategy, but first you should understand what options are and how they work.
An option gives its holder the right, but not the obligation, to buy or sell the underlying asset at a specified price on or before its expiration date. There are two types of options: a call, which gives the holder the right to buy the option, and a put, which gives its holder the right to sell the option. A call is in-the-money when its strike price (the price at which a contract can be exercised) is less than the underlying price, at-the-money when the strike price equals the price of the underlying and out-of-the-money when the strike price is greater than the underlying. The reverse is true for puts. When you buy an option, your level of loss is limited to the option’s price, or premium. When you sell a naked option, your risk of loss is theoretically unlimited.
Options can be used to hedge an existing position, initiate a directional play or, in the case of certain spread strategies, try to predict the direction of volatility. Options can help you determine the exact risk you take in a position. The risk depends on strike selection, volatility and time value.
No matter what strategy they use, new options traders need to focus on the strategic use of leverage. Being systematic and probability-minded pays off greatly in the long run, instead of buying out-of-the-money options just because they are cheap, new traders should look at closer-to-the-money option spreads that have a higher probability of success.

Example: If you are bullish on RELIANCE and want to use the NSE exchange, which is currently trading at 1024, instead of spending 15000 Rs on the JAN 1020 call looking for a home run, you have a greater chance of making profits by buying the JAN 1040/1060 call spread for 7500 Rs.

Picking the proper options strategy to use depends on your market opinion and what your goal is.

COVERED CALL

Options Settlement

TO GET OPTION STRATEGY FOR JANUARY SERIES PLEASE  FILL UP THE FORM GIVEN TO YOUR RIGHT SIDE>>>>>>>>>>>>>>>>>

Options Settlement is the process by which the obligations between the holder and writer of an options contract are resolved after the contract is exercised. Settlement can happen under 2 circumstances; Voluntary exercise by the holder or automatic exercise upon expiration. In an options trade, the buyer of the option pays the option price or the option premium. The options seller has to deposit an initial margin with the clearing member as he is exposed to unlimited losses. Settlement in options trading is the process where the terms of an options contract are resolved between the holder and the writer. In options trading, the holder is the one who owns an options contract and a writer is the person who sold the holder that options contract.

TRADE STATS OF 20 NOV 2015

As on Nov 20, 2015 15:30:45 IST
Product	No. of contracts	Turnover (cr.)*	Premium Turnover (cr.)
Index Futures	3,79,982	21,289.41	-
Vol Futures	0	0.00	-
Stock Futures	7,50,999	37,748.72	-
Index Options	49,26,222	2,87,146.13	1,471.02
Stock Options	3,62,435	18,463.48	195.07
F&O Total	64,19,638	3,64,647.74	1,666.09

COVERED LONG HEDGE WITH OPTION STRATEGY

Today we offer you Sbin Long Future strategy covered with long Put.In light of expected RBI policy we believe this strategy will give you high upside potential with limited down side risk.
You buy stock because you’re bullish and expect the stock's price to go up. Since you’re bullish, chances are you aren’t too preoccupied with the downside. But as we all know, markets can shift quickly. Puts are a handy tool to help lock in profits on your existing positions in the event of a sudden reversal. This is the strategy which is ideal in this case.  
1ST LEG 

"Buy SBIN Future Jun @ 280"

2ND LEG

"Buy SBIN Jun 280 Put @ 10"

WHAT ARE OPTION ? AND TYPES OF OPTION

OPTION

An option is a contract that gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a specific price on or before a certain date. An option, just like a stock or bond, is a security. It is also a binding contract with strictly defined terms and properties.

CALLS AND PUTS

The two types of options are calls and puts:

A call gives the holder the right to buy an asset at a certain price within a specific period of time. Calls are similar to having a long position on a stock. Buyers of calls hope that the stock will increase substantially before the option expires.

A put gives the holder the right to sell an asset at a certain price within a specific period of time. Puts are very similar to having a short position on a stock. Buyers of puts hope that the price of the stock will fall before the option expires.

Participants in the Options Market

There are four types of participants in options markets depending on the position they take:

·              Buyers of calls

·              Sellers of calls

·              Buyers of puts

·              Sellers of puts

People who buy options are called holders and those who sell options are called writers; furthermore, buyers are said to have long positions, and sellers are said to have short positions.

Implied Volatility May Continue to Swing

FOR BEST OPTION TIPS FILL UP THE FORM GIVEN TO YOUR RIGHT SIDE>>>>
The last several months, the market has shown some good movement with some wild swings. The S&P 500 and Dow set their all-time highs once again, and then promptly moved lower. Now we are about to start the next earnings season and the roller-coaster ride may continue. It is important for option traders to understand one of the most important steps when learning to trade options; analyzing implied volatility and historical volatility. This is the way option traders can gain edge in their trades. But analyzing implied volatility and historical volatility is often an overlooked process making some trades losers from the start. An option trader needs to look back at the last couple of months of option trading to see how volatility played a crucial part in option pricing and how it will help them going forward.
Implied Volatility and Historical Volatility
Historical volatility is the volatility experienced by the underlying stock, stated in terms of annualized standard deviation as a percentage of the stock price. Historical volatility is helpful in comparing the volatility of a stock with another stock or to the stock itself over a period of time. For example, a stock that has a 30 historical volatility is less volatile than a stock with a 35 historical volatility. Additionally, a stock with a historical volatility of 45 now is more volatile than it was when its historical volatility was, say 30.