CALL PUT RATIO

The put-call ratio is a popular tool specifically designed to help individual investors gauge the overall sentiment of the market. The ratio is calculated by dividing the number of traded put options by the number of traded call options. As this ratio increases, it can be interpreted to mean that investors are putting their money into put options rather than call options. An increase in traded put options signals that investors are either starting to speculate that the market will move lower, or starting to hedge their portfolios in case of a sell-off...

BOOK PROFIT IN IDFC BULL CALL SPREAD STRATEGY

IDFC strategy given on 25 oct 2012 is  giving  current profit of  1.1  contd to hold ...Book profit when you get profit of Rs 3. IDFC 160 NOV call is trading at 7.30 and  IDFC 170 NOV  call is trading at 3.20 now.More about Option Call Put tips on google+

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.

PANTALOONR STRANGLE STRATEGY

STRANGLE STRATEGY IN PANTALOONR :
BUY PANTALOONR 220 CALL @2 AND PANTALOONR 200 PUT @2.50

FREE OPTION CALL PUT TIPS

To get FREE OPTION CALL PUT TIPS please fill the form on right side of your screen

BOOK PROFIT IN HEROMOTOCO STRATEGY

Our HEROMOTOCO STRANGLE STRATEGY given  is giving profit of RS 24 per lot and contd… to hold. The call  was given @25 is trading at @79 now, put is on hold.

TATASTEEL STRANGLE STRATEGY

 Our Tatasteel  strangle strategy given in post is giving the profit of Rs 4, contd. to hold....

FUTURE OPTION TIPS FOR 10 AUG 2012

The SBI 1950 PUT made a high of 63 today, Book profit near Rs. 70 and SBI 2100 CALL  still contd... to hold.

BUY ITC 270 CALL @3.20 TG 4.90 ,6.50 SL 2.

FUTURE OPTION TIPS FOR 31 JULY 2012

BUY NIFTY FUTURE ABOVE 5140 TG5170, 5200, 5230 SL 5110.

BUY  IDFC FUTURE ABOVE 130 TG 134, 137 SL 126.

SELL INDIACOM FUTURE BELOW 77 TG 76.10, 75.20 SL 78.20

YOU CAN ALSO CHECK  NIFTY TIPS

FUTURE OPTION TIPS FOR 25 JULY 2012

NIFTY  STRANGLE  STRATEGY MADE A HIGH OF 94 TODAY, BOOK @ 100.

THE CALL GIVEN OF NIFTY 5200  PUT HAS ALSO ACHIEVED ITS FIRST TG, THE CALL OF J P ASSOSIATES GIVEN IN OUR LAST POST HAS ALSO ACHIEVED ITS TG’S.

BUY TITAN FUTURE ABOVE 230 TG 236, 242, 246 SL 226.

BUY LT AUG 1250 PUT @ 13 TG 16, 21 SL 7.

FUTURE OPTION TIPS FOR 20 JULY 2012

SELL TATAMOTORS 220 PUT OPTION @ 1.70 AND SELL TATAMOTORS 230 CALL OPTION @ 2 SL 5.5 (when cumulative price cross 5.5)

FUTURE OPTION TIPS FOR 19 JULY 2012

BUY ICICI BANK 944 CALL OPTION@ 14TG 18,22,25 SL 9

BUY HINDUNILVR FUTURE ABOVE 450 TG 455, 461 SL 444

FUTURE OPTION TIPS FOR 19 JUN 2012

BUYTATASTEEL 420 CALL @ 9 TG  14, 17, 20

BUY NIFTY FUTURE ABOVE 5080  TG 5110 ,5140,5170 SL 5050 .

SELL CAIRN INDIA FUTURE BELOW 325 TG 315 SL 332

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.......

FREE FUTURE OPTION TIPS

TO GET FREE FUTURE OPTION TIPS PLS  PROVIDE YOUR MOBILE NUMBER AND NAME IN "GET FREE TIPS FORM " 

FUTURE VS OPTION

Here we attempt to explain basic difference between Future and Option Contracts

Premium

While you pay a fee called the "premium" when buying stock options, there are no premiums to be paid in a futures contract. The initial amount of money (known as "Initial Margin") paid when you buy a futures contract is a fraction of the price paid for the underlying stock. While wrinting options you receive premium.

Obligations

Buyers of stock options are not obligated to exercise the rights to buy the underlying stock at all while buyers of futures contracts  or option writers are obligated  settle difference with cash market and pay mark to mark daily.

Liability

Buyers of futures contracts  and option writers are exposed to unlimited liability should prices move against them while buyers of stock options lose only the amount of money used to purchase those stock options.

Expiration

Buyers of futures contracts can carry forward  their position by selling current month contract and buying next month or vice versa. Options expire worthless if the options are out of the money.

Versatility

Options trading is a lot more versatile than futures trading as the unique combination of call options and put options along with the premium on each contract made it possible for options strategies that profit in all directions. Apart from arbitraging, futures trading is basically single directional (you make money only when price moves in one direction).

By now, it should be clear that futures and stock options trading are two totally different things with their own trading characteristics. Futures trading is an important risk management and speculative technique while options trading has evolved to become a stand-alone strategic investment. Futures should never be made a replacement for stock options trading and stock options trading cannot replace Futures as well. Both trading instruments serves different purposes and should find their place in every well diversified portfolio. 

6 Golden Rules For Option Trading

6 Golden Rules For Option (call put) Trading

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.

4. Don’t take too much risk

Risk associated in every Option call should be very low and well calculated before entering any trade.

5. Minimize all trading business costs

You should select your broker carefully and should be aware of all the cost associated with each trade.

6. Be well educated
Keep a track of borad meetings ,any possible major event in market Etc because they create huge effect on Option pricing

WHAT IS OPTION CALL PUT

What is an option?

An option contract gives the buyer the right, but not the obligation to buy/sell an underlying asset at a pre-determined price on or before a specified time. The option buyer acquires a right, while the option seller takes on an obligation. It is the buyer’s prerogative to exercise the acquired right. If and when the right is exercised, the seller has to honour it. The underlying asset for option contracts may be stocks, indices, commodity futures, currency or interest rates

What are the types of options?

Broadly speaking, options can be classified as ‘call’ options and ‘put’ options. When you buy a ‘call’ option, on a stock, you acquire a right to buy the stock. And when you buy a ‘put’ option, you acquire a right to sell the stock. You can also sell a ‘call’ option, in which, you will acquire an obligation to deliver the stock....

And when you sell a ‘put’ option, you acquire an obligation to buy the stock.

What do you understand by the term option premium?

Option premium is the consideration paid upfront by the option holder (buyer of the option) to the option writer (seller of the option). The option holder gets the right to buy / sell the underlying.

What is the strike price or the exercise price of the option?

The right or obligation to buy or sell the underlying asset is always at a pre-decided price known as the ‘strike price’ or ‘exercise price’, which is linked to the prevailing price of the underlying asset in the cash market. Usually, option contracts are available on the underlying asset on various strike prices (generally, five or more)-divided equally on either side of its spot price.

How does an American option differ from a European option?

In ‘European’ options, a buyer can exercise his option...

only on the expiration date, that is, the last day of the contract tenure. Whereas in ‘American’ options, a buyer can exercise his option any day on or before the expiration date.In the Indian equity market context, index options are European style, while stock options are usually American in nature.

How do options differ from futures?

In futures, both the buyer and the seller are obligated to buy and sell, respectively, the underlying asset-the quid pro quo relationship. In case of options, however, the buyer has the right, but is not obliged to exercise it. Effectively, while buyers and sellers face a linear payoff profile in futures, it’s not so in the case of options. An option buyer's upside potential is unlimited,while his losses are limited to the premium paid. For the option seller, on the other hand,his maximum profits are limited to the premium received, while his loss potential is unlimited.