Always Chose Liquid Counters to Trade Options

Simply put, liquidity is all about how quickly a trader can buy or sell something without causing a significant price movement. A liquid market is one with ready, active buyers and sellers at all times.Here’s another, more mathematically elegant way to think about it: Liquidity refers to the probability that the next trade will be executed at a price equal to the last one.Stock markets are generally more liquid than their related options markets for a simple reason: Stock traders are all trading just one stock, but the option traders may have dozens of option contracts to choose from. Stock traders will flock to just one form of DLF stock, for example, but options traders for DLF have perhaps six different expirations and a plethora of strike prices to choose from. More choices by definition means the options market will probably not be as liquid as the stock market.Of course,

BOOK PROFIT IN TATA MOTORS OPTION STRATEGY

BOOK PROFIT IN TATAMOTORS 360 PUT  GIVEN @ 3.25 NEAR 10 AND  CONTINUE TO HOLD CALL TILL NEXT FOLLOW UP.

BOOK PART PROFIT IN SBIN STRANGLE

SBIN STRANGLE UPDATE:BOOK PROFIT IN SBIN 2150 PUT NEAR 75-77 HOLD 2400 CALL-

SBIN STRANGLE STRATEGY

SBIN STRANGLE :

BUY SBIN 2400 CALL @ 40 AND 

BUY SBIN 2150 PUT @ 44

LOT SIZE : 125

TOTAL INVESTMENT(40+44)*125=10500

RETURN UNLIMITED

Book Profit in Petronet Plain Vanila Option Strategy

Petronet 170 call given @ 1.9 in last post has made high of 4.6 today.Book some profit Near 5.5 and keep SL cost.Pls up the form ------> to Get Option Tips On mobile.........

NIFTY LONG STRADDLE STRATEGY

Buy Nifty 5600 call @45

Buy Nifty 5600 put @50

More about Option Call Put tips on google+

PAY OFF TABLE

HOW TO HEDGE FUTURE WITH OPTION

      I.            Buy corresponding number of options as your Future positions. For example, if you have a position size of five futures contracts, purchase five corresponding options to completely hedge your position. Also, make sure the expiration month of the options you purchase matches the expiration date of the futures contracts you own.

  II.            Select a strike price that fits your accepted level of risk tolerance. When you purchase an option, you must specify a strike price. The closer the strike price is to the current futures price, the more expensive the option.

THINGS TO KEEP IN MIND WHILE TRADING OPTIONS

Below given are the DO’S while trading in options

1.Always deal with the market intermediaries registered with Sebi/Exchanges

2.Provide complete and correct email address and mobile number while opening                   trading / demat account.

3.Trade wisely ,create your own trading strategy depending upon the conclusions drawn from the various sources.

4.Insist on a Contract Note for every trade....

BEST OPTION CALL PUT TIPS

1. Clear Vision Of Target

We must always remember that reward and risk go hand-in-hand in trading and that we cannot expect to achieve high returns without planning for high risk (i.e. draw-downs). Your objectives and goals will be very specific to you, but they must have the following characteristics to be useful:

Be measurable
Be achievable
Be worthwhile
Be positive 

2. Discipline

This is most important part of option trading. In order to realize the full potential of your trading systems it is critical that you take every trading entry, adjust every stop, and close out every trade as and when your system says you should do

3. Never add to a losing trade

Averaging is Options could prove to be very dangerous as there is always time factor.

FUTURE VS OPTION

The main fundamental difference between  Future and option lies in the obligations they put on their buyers and sellers. An option gives the buyer the right, but not the obligation to buy or sell a certain asset at a specific price at any time during the life of the contract. A futures contract gives the buyer the obligation to purchase a specific asset, and the seller to sell and deliver that asset at a specific future date, unless the holder's position is closed prior to expiration.

Aside from commissions, an investor can enter into a futures contract with no upfront cost whereas buying an options position does require the payment of a     Premium. Compared to the absence of upfront costs of futures, the option premium can be seen as the fee paid for the privilege of not being obligated to buy the underlying in the event of an adverse shift in prices. The premium is the maximum that a purchaser of an option can lose.......

DLF STRANGLE STRATEGY

Market is eyeing RBI for rate cuts which can have major impact on interest rate sensitive stocks. Dlf has seen consolidation in charts. Betting on huge moves either side in this counter can give a good payoff. We recommend long strangle strategy in DLF with a week’s outlook

DLF STRANGLE STRATEGY

LEG1: BUY DLF 180  PUT @3

LEG2: BUY DLF 210 CALL @3

TOTAL RISK  =(3+3)*1000=6000

OUT LOOK  5-7 Days.

OPTION WRITING - 3 MISTAKES

As our markets are becoming mature, the number of option writers is increasing. It is believed than generally 80 % of option buyers loose money so what should we do..Option writing is other way round..

Option writing or in other words option selling means to sell option call and puts for a premium.

But while option selling can be a powerful way to diversify into a non-correlated, non-directional strategy, there is no free lunch. Writing options is one of those strategies that is easy to understand but infinitely more difficult to master.

Experience shows, however, that not doing the wrong things will have as much, if not more, an impact on your portfolio’s ultimate performance than doing all of the right things. Therefore, we can learn a lot from the errors of others. To that end, we’ll explore the three biggest mistakes that option sellers make and, more importantly, discuss simple ways to avoid making them.