SBIN STRANGLE STRATEGY FOLLOW UP

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"SBIN 295 PUT BOOK PROFIT NEAR 8"

IN TURBULENT TIMES LIKE THIS OPTION IS BEST TOOL

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What if you do not know which direction a stock will move in, but you have the sense it will move dramatically one way or the other? There is an options strategy for that, too. It is called a strap strategy, which we have given in our last post in that we have booked all the 3 legs in huge profits.

TOTAL RISK: RETURN 
32200: 59500 

More specifically, it is called a long strap strategy - buying 1 put and 2 call option on the same underlying asset, exercise price and expiration date. For more details visit http://optioncallputtradingtips.blogspot.in/2016/11/rocking-option-strap-strategy.html Whether the stock moves one way or the other, the investor profits, but the stock has to move enough to pay off the premiums on both options. Essentially, the investor is betting on volatility. 

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CALENDAR/TIME SPREADS

another strategy used in options is calendar, or time, spreads. In a calendar spread, you establish your position by entering a long and short position at the same time on the same underlying asset, but with different delivery months.
The point of this strategy is, time decay happens much more quickly the closer we get to expiration. The theory is that when you short the front-month option, you’ve got that quickly-evaporating time premium working with you, faster than the decay in the further out option that you bought. “Just like the call and put spreads, you’re paying a debit for the spread and the further out you go in time; the bigger that debit’s going to be. You’re looking for a stock at expiration to be at the strike that you have put this spread on”.

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

TRADE STATS OF 3/11/2015

Instrument wise Volume and Turnover

TRADE STATS OF 3/11/2015

As on Nov 03, 2015 15:30:18 IST
Product	No. of contracts	Turnover (cr.)*	Premium Turnover (cr.)
Index Futures	2,06,306	11,747.52	-
Vol Futures	1	0.09	-
Stock Futures	4,24,688	21,864.48	-
Index Options	14,49,551	87,233.68	903.00
Stock Options	1,86,334	9,894.81	207.69
F&O Total	22,66,880	1,30,740.58	1,110.68

 

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.

 

 

BINARY OPTION STRATEGIES & MANAGEMENT

As an entertaining and interesting trading method, binary option trading is becoming popular among the investors day by day.

A lot of binary option strategies are available which the traders use in order to succeed in trade. The basic concepts of all binary option strategies are the same although different investors follow different strategies. As opposed to other trades, binary option trading offers only two probable outcomes, loss or gain.

In binary option trading the turnover is fast which is yielded by calls and puts. Because of this if a good binary option strategy is used, traders would see most of their investments bringing high returns.

There are some basic strategies followed by all traders concerning the binary option strategy guide. The first one is the pairing up of an “in the money” call and money put. That’s why you can still earn money if the spot price is between the two prices at the expiration.

Another useful strategy in binary option trading is the pairing the put with a call into a hedge and double position. This binary option strategy helps to make very high profits.

Binary option betting strategy is another very popular strategy. In this strategy an investor uses a pull or call option if an unexpected move occurs on the market. This strategy is based on the fact that people put positions on indicators which have large scale impacts on the market prices.

COMPARISON BETWEEN CASH AND FUTURE TRADING

1.In the cash segment, one can pick up as many shares one wants starting from just one share but Futures, a trader cannot buy less than the lot size prescribed
2. From an investors point of he should invest in Cash Segment. Since Futures are a trading tool, the risk is also high to a large extent.
3. In Futures, a trader needs to pay 33% tax on the profit. In equity, it is a flat proportion of 10% (short term capital gains) if trading done is within a year and no tax if sold later a year (long term capital gains).............

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ROCKING RCOM STRANGLE STRATEGY !!!!!!!!

Rcom strangle strategy rocks!!!!!!!!!!!!
RCom strategy update:
Book Profit in Rcom 130 Call Near 5.8
Now  book profit in Rcom 120 call Near 2.3 .
Total cost=3.2
Net profit = 9800

HOW TO BUY STOCKS FOR DIVIDEND

Financing in shares that paying for dividends is solely the greatest financial decisions a stakeholder can step to make. These funds not only present a prospect to amplify net value from growing share prices, they also can assist harmonize an investor’s income for several years. So long as an investor is scrupulous about choosing these investment options, there is meagre supplementary menace over the long-standing. Stock Dividends can be outstanding as a source of steady income, while you still get to uphold the stock shares for further income. There is also sensitivity that companies, which can pay for dividends, are usually steadier....

TIME DECAY IN OPTION

The ratio of the change in an option's price to the decrease in time to expiration. Since options are wasting assets, their value declines over time. As an option approaches its expiry date without being in the money, its time value declines because the probability of that option being profitable is reduced. Time decay is a crucial component traders consider when deciding when/where to buy sell options.....

BANKING LICENSE:26 IN QUEUE

A banking license is a prerequisite for a financial institutionthat wants to provide  services. Under most jurisdictions the fundamental banking activities, such as taking deposits from the general public are exclusive to holders of a banking license. A non banking servicesis an institution that provides financial services without meeting the legal definition of a bank, such as holding a banking license

Licenses are typically issued by the banking regulatory body in which the bank is established. There is a relatively long and complicated procedure that goes into the application. This procedure will also depend on the type of bank license that you wish to apply for. Licensing is generally broken down into different categories, while each category has a different specialization, and a different time frame involved in the banking license application process....

OPTION ADJUSTION

Adjusting an option position really is an essential skill for any investor – I would even say it is a mandatory requirement. Properly managing risk by adjusting can help you repair strategies that have gone wrong, limit huge losses or even create additional potential gains As a disclaimer it’s important that you know both HOW to adjust an option trade and that you are aware of the additional broker commissions you will be charged to exit/enter additional contracts. Take your time when adjusting so that you don’t adjust and create an even bigger hole from which to dig out of.

1. What’s the goal?

 Make sure that you are either reducing risk somehow someway or  creating a new strategy that could make you more money.

2. Are you really reducing risk?

Forget for a minute that you are not going to make money if you get into a bad trade.

3. Should you just close out the trade?

This is always one of my 1st considerations. If you’ve made a small profit and things are starting to go south it might be a wise decision to just close out the trade and re-evaluate the market. Don’t let your ego get in the way of making money.

4. How have the market trend  changed?

I’m sure when you entered the trade you had a firm opinion on the market if the trend is changing then is your options strategy structured to profit from the new market Wait to see a medium term change to adjust and remember that 1 day doesn’t make a trend.

RELIANCE STRATEGY UPDATE

RELIANCE OPTION STRATEGY 

Book CALL @ 27-28 and PUT contd… to hold. 

RELIANCE STRANGLE STRATEGY

BUY RELIANCE 820 CALL @11

BUY RELIANCE 760 PUT @11

COST =22     

 RISK PER LOT = 5500

RETURN = UNLIMITED

UPPER BREAK GIVEN POINT=842

LOWER BREAK GIVEN POINT=738

PAY OFF TABLE:...

A SYNTHETIC SHORT PUT

A synthetic short put is created when long stock position is combined with a short call of the same series. It is so named because the established position has the same profit potential a short put.

The covered call is a popular example of a synthetic short put.

 When to Use

1.In bearish momentum  but want limited risk.......

5 MISTAKES WHILE TRADING IN OPTION

1.Not having a defined exit plan

2.Trying to make past losses by doubling up

3.Trading illiquid option

4.Waiting too long to buy back short strategies

5.Legging into spread trades

CALL BACKSPREAD STRATEGY

The call backspread (reverse call ratio spread) is a bullish strategy in options trading that involves selling a number of call options and buying more call options of the same underlying stock and expiration date at a higher strike price. It is an unlimited profit, limited risk options trading strategy that is taken when the options trader thinks that the underlying stock will experience significant upside movement in the near term....