Showing posts with label free option trading tips. Show all posts
Showing posts with label free option trading tips. Show all posts

Friday 4 December 2015

TATAMOTORS CALL ROCKS.....!!!!!!!!!!!!!!!!!!

"Yesterday’s TATAMOTORS Call Achieved 1st tgt Book partial profit @ 11.60 Profit is 3300 in just 1 lot"
It was a sea of red in markets on week ended Friday. Today bears was on driver seat they had pulled nifty below it’s support level of 7780. Most other Asian markets traded weak after the ECB move. Japan's Nikkei ended down more than 2 per cent while the South Korean Kospi was down 1 per cent at close. Hang Seng index fell 1 per cent at close. China's Shanghai Composite ended the session 1 per cent lower. Total number of turnover in stock option 12,078 & in nifty option is 1,04,923 .Call put ratio in stock option is 0.45 in index option is 0.75. In stocks SUNPHARMA 760 to 800 call  & SUNPHARMA 740 put are most traded while in index 7800 put was most traded .

Wednesday 25 November 2015

Upcoming Derivatives Expiry 26 nov 2015

The Nifty, which managed to reclaim its level 0f 7,800-7,850 this past week, will be watched keenly as volatility is expected to increase ahead of the expiry of November futures & options contracts due on Thursday, November 26.
Parliament’s upcoming winter session and the derivatives’ expiry are set to rock the equity markets during next week’s trading session. As per market observers, with the end of the earnings season, investors will be glued to political developments to see whether the government is able to pass key economic legislation during the winter session that begins on November 26 and will run till December 23.
Markets will now look forward to political cues such as the passing of key bills and the government’s stance towards the opposition in ensuring the winter session is not wasted, Last week, the government’s efforts to reach out to the opposition before the crucial winter session to get the Goods and Services Tax (GST) bill passed cheered the equity markets.
Other than the winter session, there were concerns over an extended rate hikes in the US The US Fed held an 'unscheduled' meet on Monday. The meet precedes the Federal Reserve policy meet in December, when a rate hike is expected to be announced.
The US central bank has given signs that it might go in for a series of gradual rate hikes starting from December.
However, in the short term, higher interest rates in the US are expected to lead away FPIs (Foreign Portfolio Investors) from emerging markets such as India.
Besides a US rate hike, the derivatives expiry slated for Thursday has caused some nervousness, as Securities and Exchange Board of India (SEBI) has reduced the lot size in futures and options (F&O) segment which has resulted in lower volumes.
This has indirectly rubbed on the trading dynamics of the cash segment.
"We expect markets to continue to remain under pressure

Friday 11 September 2015

Option Delta

Delta is probably the first Greek an option trader learns and is focused on. The ratio comparing the change in the price of the underlying asset to the corresponding change in the price of a derivative
In fact it can be a critical starting point when learning to trade options. A positive delta means the position will rise in value if the stock rises and drop in value of the stock declines. A negative delta means the opposite. The value of the position will rise if the stock declines and drop in value if the stock rises in price.
Delta is one of four major risk measures used by option traders. Delta measures the degree to which an option is exposed to shifts in the price of the underlying asset. Delta tends to increase as you get closer to expiration for near or at-the-money options. Delta is not a constant
Call Options
Whenever you are long a call option, your delta will always be a positive number between 0 and When the underlying stock or futures contract increases in price, the value of your call option will also increase by the call options delta value.
Put Options
Put options have negative deltas, which will range between -1 and 0. When the underlying market price increases the value of your put option will decreases by the amount of the delta value. Conversely, when the price of the underlying asset decreases, the value of the put option will increase by the amount of the delta value.
 
 

Thursday 25 December 2014

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Friday 25 May 2012

WHAT IS BULL CALL SPREAD


OPTION TRADING STRATEGY
Bull Call Spread

The bull call spread option trading strategy is employed when the options trader thinks that the price of the underlying asset will go up moderately in the near term.
Bull call spreads can be implemented by buying an at-the-money call option while simultaneously writing a higher striking out-of-the-money call option of the sameunderlying security and the same expiration month.
Bull Call Spread Construction
Buy 1 ITM Call
Sell 1 OTM Call





By shorting the out-of-the-money call, the options trader reduces the cost of establishing the bullish position but forgoes the chance of making a large profit in the event that the underlying asset price skyrockets. The bull call spread option strategy is also known as the bull call debit spread as a debit is taken upon entering the trade

Limited Upside profits

Maximum gain is reached for the bull call spread options strategy when the stock price move above the higher strike price of the two calls and it is equal to the difference between the strike price of the two call options minus the initial debit taken to enter the position.

The formula for calculating maximum profit is given below:
  • Max Profit = Strike Price of Short Call - Strike Price of Long Call - Net Premium Paid - Commissions Paid
  • Max Profit Achieved When Price of Underlying >= Strike Price of Short Call

Limited Downside risk

The bull call spread strategy will result in a loss if the stock price declines at expiration. Maximum loss cannot be more than the initial debit taken to enter the spread position.

The formula for calculating maximum loss is given below:
  • Max Loss = Net Premium Paid + Commissions Paid
  • Max Loss Occurs When Price of Underlying <= Strike Price of Long Call

Breakeven Point(s)

The underlier price at which break-even is achieved for the bull call spread position can be calculated using the following formula.
  • Breakeven Point = Strike Price of Long Call + Net Premium Paid

Friday 4 May 2012

GET OPTION CALL PUT TIPS ON MOBILE

TO GET OPTION CALL PUT TIPS ON MOBILE

CLICK HERE

PLS FILL  YOUR NAME AND MOBILE NUMBER IN FREE TRIAL FORM

More about Option Call Put tips on google+

Monday 23 April 2012

OPTION CALL ROCKING!!!

Nifty MAY 5100 PUT given on 19 april 2012(http://niftytipsniftylevels.blogspot.in/2012/04/nifty-outlook-for-tomorrow_18.html) is rocking now!!!.call given @56  TG 86,target achieved enjoy your profits ! keep reading …..


For Nifty Daily Outlook and free intraday nifty tips please visit Nifty Tips

Tuesday 3 April 2012

DLF SHORT STRANGLE STRATEGY


OPTION CALL PUT STRATEGY
Option calls premium have time value in it. Tomorrows trading session is followed by very Long weekend. To en cash this situation we recommend Short Strangle strategy in DLF as it is trading around its average Price.

DLF SHORT STRANGLE STRATEGY
LEG1: SELL DLF 200 PUT@5.70
LEG2: SELL DLF 220 CALL@4.70
CREDIT RECD =(5.70+4.70)*1000=10400
OUT LOOK  5-7 Days
Continue to Hold With SL of 3 Rs

Low Volatility Option Strategy


Low Volatility Options Strategies

Market is in very narrow range. April is generally low volatility month. In such scenario Long Option Traders tend to loose money day by day. Here we present some option strategies for this type of lack luster market.

Low volatility options trading strategies you can use:

Short Puts and Calls – This is the main strategy we use here and by far the most profitable. It’s cheap and you don’t have to enter multiple options making it an easy trade for beginners. With short options you can move your strike price far from the current market forcing the market to make dramatic moves in short time period. You also have positive time decay since you collect the premium up-front and let the option expire worthless at expiration.




   Short Strangle – A combination of short Puts and short Calls. Again a great risk reward type trade because you collect an up-front premium and let the options expire worthless in a flat market.

Long Butterfly Spread – Very complicated and complex option trade. No recommended for beginners! This is a great strategy with limited risk but you have to be dead on in your analysis of where the stock will close at expiration. Sure the risk is capped but if your not right at expiration there’s a 100% chance you will lose money.


Monday 2 April 2012

BOOK PROFIT IN NIFTY SHORT STRANGLE



BOOK PROFIT IN NIFTY SHORT STRANGLE

NIFTY SHORT STRANGLE BOOK PROFIT
5100 PUT BUY @ 41(SOLD @ 64)
5500 CALL BUY @ 41(SOLD @ 64)

TOTAL PROFIT =2300 PER LOT
http://www.optioncallputtradingtips.blogspot.in/2012/03/nifty-short-strangle-strategy.html

Saturday 28 January 2012

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

Monday 23 January 2012

What is Sell Strangle Option Strategy ?

Sell Strangle Option Strategy

When volatility is very high, and the market has just made a dramatic move and you are expecting it to consolidate and take some time to digest its gains, you might consider selling a strangle.
This strategy involves selling an out-of-the-money call option and an out-of-the-money put option on the same asset with the same expiration date. This strategy differs from the Sell Straddle strategy because the options are not at the same strike price. This provides a different profit/loss curve that is worth checking out.
This gives you a known, but limited gain, but does expose you to unlimited risk, so you must be careful with this position and be confident of your assumptions. It is not suitable for all investors.
With this strategy, your gain is composed of the premium you received for the call and the put, less the commissions.
When we sell a Strangle, the put and call that we sell are normally on over-priced options that are out-the- money. We consider doing this after a dramatic move in the market, when we are expecting it to consolidate the move and digest its gains before moving again. Because of the dramatic move that was made, volatility is high, making the options we sell very expensive. Then as the market consolidates, volatility decreases and lowers the price of the options. Decay also works in our favor with this position.
But be ready to buy back one of the options if there is any indication that the market will resume its trend or reverse direction. If it looks like the market will trend up, buy back the call; if it looks like the market will trend down, buy back the put.
It is also important to cover risks and caveats of this strategy.
The risk of this position is unlimited so you must be very careful. Remember that the commission you pay for this position will be higher because you are initiating two related option transactions.
It is important to analyze your expectations for the underlying asset and for the market before selecting your strategy.

Monday 9 January 2012

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.

Monday 2 January 2012

IFCI STRANGLE STRATEGY

OPTION CALL PUT STRATEGY

IFCI  is extremely volatile these days. Annulized volatility of IFCI is above 91.We suggest strangle strategy in IFCI to make most of this situation.
                      
The long strangle, also known as buy strangle or simply "strangle", is a neutral strategy in options trading that involve the simultaneous buying of a slightly out-of-the-money put and a slightly out-of-the-money call of the same underlying stock and expiration date.
IFCI STRANGLE STRATEGY

LEG1: BUY IFCI 25 CALL @ .75
LEG2: BUY IFCI 20 PUT @ .85
COST =12800     
 RISK PER LOT = (.75+.85)*80000=12800
RETURN = UNLIMITED
LOWER BREAK EVEN POINT :18
HIGHER BREAK EVEN POINT 27

Pay off table


Closing price
Lot size
trading cost
Total Investment
Return from call
return from put
Payoff
17
8000
12800
0
24000
11200
17.5
8000
12800
0
20000
7200
18
8000
12800
0
16000
3200
18.5
8000
12800
0
12000
-800
19
8000
12800
0
8000
-4800
19.5
8000
12800
0
4000
-8800
20
8000
12800
0
0
-12800
20.5
8000
12800
0
0
-12800
21
8000
12800
0
0
-12800
21.5
8000
12800
0
0
-12800
22
8000
12800
0
0
-12800
22.5
8000
12800
0
0
-12800
23
8000
12800
0
0
-12800
23.5
8000
12800
0
0
-12800
24
8000
12800
0
0
-12800
24.5
8000
12800
0
0
-12800
25
8000
12800
0
0
-12800
25.5
8000
12800
4000
0
-8800
26
8000
12800
8000
0
-4800
26.5
8000
12800
12000
0
-800
27
8000
12800
16000
0
3200
27.5
8000
12800
20000
0
7200
28
8000
12800
24000
0
11200
28.5
8000
12800
28000
0
15200
29
8000
12800
32000
0
19200
29.5
8000
12800
36000
0
23200
30
8000
12800
40000
0
27200
30.5
8000
12800
44000
0
31200
31
8000
12800
48000
0
35200
31.5
8000
12800
52000
0
39200



The long options strangle is an unlimited profit, limited risk strategy that is taken when the options trader thinks that the underlying stock will experience significant volatility in the near term. Long strangles are debit spreads as a net debit is taken to enter the trade.