HEDGING FUTURE WITH OPTION

Hedging in common words is insuring against a negative event. This doesn't prevent a negative event from happening, but if it does happen and you're properly hedged, the impact of the event is reduced.
 HEDING FUTURE WITH OPTION

 1.Note the size of your futures position and buy a corresponding number of options.....

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

OPTION BUYING V/S WRITING

Definition of  Buy-Write

Option buying means buying a put option and option writing means selling a put option. Option buying has limited risk where as option writing has as much risk as future.

OPTION BUYING V/S OPTION WRITING

1.Buying options - limited loss, unlimited profits where as Writing options - limited profits, unlimited losses 

2.Option writers have a significantly higher chance of making money as compared to option buyers......

DIWALI 2012 PICKS

1.PANTALOON R

   Buy  around 198 tg 259

   Expected returns= 23.55%

 2.ALEMBIC PHARMA

   Buy  around 68 tg 99-100

   Expected returns=32%...

BOOK PROFIT IN IDFC STRATEGY

IDFC strategy given on 25 oct 2012 is  giving  profit of  3.1 Hope you have booked profit. IDFC 160 NOV call is trading at 10  and  IDFC 170 NOV  call is trading at 4.65 now.More about Option Call Put tips on google+

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+

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.

FREE OPTION TIPS ON MOBILE

http://optioncallputtradingtips.blogspot.in/2012/05/get-free-option-call-put-tips-on-mobile.html

More about Option Call Put tips on google+

                  

IDFC BULL CALL SPREAD STRATEGY

Here we present you Bull call spread option trading strategy which is explained in detail in our earlier post http://optioncallputtradingtips.blogspot.in/

IDFC BULL CALL SPREAD STRATEGY

LEG1: BUY IDFC  160 NOV CALL OPTION @ 5.10

LEG2: SELL IDFC 170  NOV CALL OPTION @ 2.2

COST =5800          

 RISK PER LOT = (5.10-2.2)*2000=5800

MAX RETURN 14200

Pay off table

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....