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DLF 250 PUT BOOK PROFIT @ 4.5 BUY GIVEN @ 2.5 PROFIT OF 6600
DLF 320 CALL KEEP HOLDING TILL FOLLOW UP
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Buying insurance
policies for investment purpose: Have you invested your money in insurance plan
to get a return in future? Big mistake! Out of 100 people I have spoken, 95
have made this mistake.. Very few people understand the difference between term
plan, endowment plan, etc.
Not able to crack the
credit card mystery: Are you paying the minimum amout due on your credit card
payment? If yes, you are trapped in credit card mystery. On the other side,
very few people really enjoy the benefits like free lounge access, buy one get
one movie ticket, etc.
No idea about the power
of compounding: Everyone has come across the formula of compounding but very
few people really understand its power. This is the reason people do not start
saving early and hence lose out on the power of compounding. Albert Einstein
said that power of compounding is the eighth wonder of the world.
Buying stocks based on
tips without any knowledge: You will find every Tom, Dick and Harry giving
stock tips over Facebook, Whatsapp and TV. Unfortunately, a lot of people fall
in a trap of these people and invest money without any knowledge. What is the
end result? They lose everything!
Becoming a victim of
lifestyle inflation: Moving from 2bhk to 3bhk just because you have got a good
hike, upgrading your car because you have got some bonus are some of the
examples of lifestyle inflation destroying financial lives.
Buying things just
because they are on discount: From Amazon’s “Great Indian Sale” to Flipkart’s
“The Big Billion Days”, everyone is encashing on the weakness of Indians buying
things just because it is on discount. Funny thing is now you will find such
sales every other month.
Getting tempted to go
for an exotic vacation : just because someone put a post on Facebook and
Instagram: Instagram and Facebook are introduced as Social Media Platform but
they are actually destroying the entire social fabric. Friends are jealous of
each other. Most of them are just social media friends. Facebook and Instagram
are more of a marketing platform where people post stuff just to get some likes
and companies promote their product and services.
Spending a bomb on
weekend parties: 5 days work and 2 days party: This is the new culture in
India. Pubs are jam-packed on weekends where people would spend a bomb on
drinks. By the end of the month, they are left with no money.
No track of cash flow:
Very few people keep a track of their expenses. Most of them just don’t know
where the money is gone.
No emergency budget: Not
having any extra money in the case of an emergency results in embarrassing
situations of borrowing money from friends and relative. Some people even break
their investments and make a big mistake.
No medical insurance: I
have seen people losing out the lifetime savings just because they did not take
medical insurance. One accident can shatter all financial dreams. Better be
insured. Healthcare cost is rising and it is impossible to manage it without
insurance.
No financial plan:
People do not know why they need to save money because they don’t know their
financial goals.
No diversification: Some
people would invest all their money in real estate, some would invest all the
money in gold, some would just keep it in the locker, some would invest all the
money in the stock market. Very few people understand the right way of
diversifying the investments.
Spending all the hard
earned money on children marriage: Thanks to our hypocritic society! People
save their entire life just to spend all the money on random relatives who only
bother about the food and arrangements. What is the topic of discussion at
weddings? “Sharma ji ne to unki beti ko car gift kari. (Mr Sharma has gifted a
car to his daughter)”. “Mehta ji ne unki beti ko 50 tola sona diya” (Mr Mehta
has gifted 500-gram gold to his daughter.)
Buying excessive gold
only to keep it in the locker: Gold worth lakhs is kept in lockers only to be
used once or twice a year. This is resulting in the money getting blocked and
hence not getting any returns on it.
An extremely
conservative approach with investment: Traditionally, people have been
risk-averse. They would just have an FD and live on 6–7% annual interest. Some
would just keep the cash at home.
Lack of clarity between
asset and liability: Having a car is not an asset because it consumes fuel and
has a maintenance cost. Its price will only depreciate in the future. Car is a
necessity but people spend a lot of money and even take the loan to buy a
luxury car over and above their budget.
Considering frugal as
cheap: A lot of people confuse economic spending with being cheap. An economic
spender does not compromise with quality but does his research well enough to
buy the product or service at the lowest rate.
Procrastinating
investment decisions: “I will invest from tomorrow”. But the problem is that
tomorrow never comes.
Spending a lot of money
on fancy stuff: A fancy car, a fancy house, a fancy watch, a fancy vacation.
People want fancy stuff and willing to pay a premium irrespective of the value
it generates.
Lack of patience: “I
can’t wait for my wealth to grow. I want to double my investments in 6 months.
I need to invest in the stock market.” A lot of people lose their lifetime of
savings because they don’t have the patience to understand the investment
option and would blindly trust anyone with their investment.
Depending upon others for investment decisions: “I don’t know anything about investment. Please manage my money.” Unfortunately, a lot of people are dependent upon others with their hard earned money. This is the reason we have a lot of self-proclaimed experts giving stock market tips.
Getting too greedy with
investment: People blindly invest their money in penny stocks, day trading,
futures and options. They eventually lose all their hard earned money. What is
the root cause? GREED
Lack of disciplined
investment: Instead of spending what is left after investing, people invest
what is left after spending. This results in indisciplined investment.
Root Cause: Lack of knowledge about personal financial management!
SRTRANSFIN ACHIEVED 1ST TARGET 1438 BUY GIVEN @ 1433
PROFIT OF 4000
CALL GIVEN IN TODAY'S POST @ 10.32 AM TO CHECK VISIT http://optioncallputtradingtips.blogspot.com/2021/03/blog-post_31.html
BUY SRTRANSFIN FUTURE 2 LOTS ABOVE 1433 TARGET 1438- 1444 STOPLOSS 1430
Many F&O traders normally are confused between buying a put option versus selling a call option. Broadly both are bearish strategies and the difference between a call and put option is that while the former is a right to buy the later is a right to sell. Obviously when you buy an option your risk is limited to the premium you pay. That is because your loss is limited to the premium paid while your profits can be unlimited. On the other hand, when sell an option, your income is limited to the option premium received but the losses can be technically unlimited. Let us understand the difference between a call and a put with example. Let us also understand how to trade in call and put options, both on the buy side and the sell side.
Call and put option with a live example
Let us assume that the current market price of Tata Steel in the spot
market is Rs.695/-
ContractCall PremiumPut PremiumITM or OTMNovember
680 Call24.00-ITMNovember 680 Put-7.00OTMNovember 720 Call7.50-OTMNovember 720
Put-28.20ITM
An In-the-Money (ITM) option is one that has intrinsic value and time value.
Take the case of the 680 Call Option on Tata Steel. The Call is currently
quoting at Rs.24, of which Rs.15 is explained by the intrinsic value of call
option (695-680). The balance Rs.9 is the time value. In case of the 680 put,
the intrinsic value is zero and so the entire Rs.7 is explained by time value
of money.
Let us come to the 720 strike. The 720 Put is currently quoting at Rs.28.20. Of
this Rs.25 is explained by intrinsic value (720-695) and the balance Rs.3.20 is
explained by time value of money. In case of the 720 call the entire Rs.7.50 is
the time value of money.
What determines the economics of buying a put versus selling call?
As we have already seen, you buy put option when you expect sharp downsides in
the stock. Therefore, you bet by limiting your risk to the option premium and
play for the downside in the stock. You sell call option when you expect that
the upsides for the stock are limited. You are indifferent to whether the stock
is stable or goes down as long as the stock does not go above the strike price.
Before getting into how to trade in call and put options, let us first
understand the difference between call and put positions with the example above.
Let us now consider 2 investors viz. Alpha and Beta. Alpha is an aggressive
investor who believes that with the metals cycle already overpriced, Tata Steel
price should correct. He expects the price to correct to Rs.640 in the next 1
week. He can sell the Tata Steel 680 call and get a maximum profit of Rs.24,
which is a good profit on his margin. However, Alpha is taking on a very huge
risk here. Since Alpha has sold the 680 Call at Rs.24, he is only covered up to
Rs.704. Any price above that will result in unlimited losses for Alpha. The
better option will be buying the 680 November Put option. If the price touches
Rs.640, then he makes a profit of Rs.33/- (40-7). In a worst case scenario if
the Tata Steel stock goes up to any level, his loss is limited only to Rs.7/-
share.
Now, let us consider the case of Beta who is more conservative. Beta is of the
view that the stock may be hovering in a range. While downsides are open, its
upside is limited to Rs.720. The best option for Beta is to sell the 720 call.
Buying the 720 put may be too expensive and buying the 680 put may be too out
of the money. Selling the 720 call will give him a premium of Rs.7.50 and serve
his view.
Buying a put option versus selling a call option: How to decide?
Your decision whether you should buy a put option or sell a call option will be
broadly guided by the following 4 considerations:
Are you having an affirmative view on the stock or index going
down? In that case it makes more sense for you to buy the put option. Your
downside risk will be limited to the option premium paid and your profits in
case the stock falls will be unlimited.
Are you having a cautiously non-affirmative view on the stock?
In this case you are only confident that the stock price is unlikely to rise
beyond a point. You are indifferent to whether the stock price goes down or stays stagnant at current
levels. In such cases, it makes eminent sense to sell the call at the strike
where you believe the stock to top out. You can also sell a lower call for
higher premium but that is taking on unnecessary risk.
Can you pay the margins for the trade? When you buy a put
option, your total liability is limited to the option premium paid. That is
your maximum loss. However, when you sell a call option, the potential loss can
be unlimited. Hence your margining will be exactly like how the margins are
imposed on futures. Be prepared for higher capital outlay in this case.
Lastly, are you playing for a rise in volatility or fall in
volatility in the market? If you are playing for a rise in volatility, then
buying a put option is the better choice. However, if you are betting on
volatility coming down then selling the call option is a better choice.
How to trade put and call options is all about knowing the difference between call and put options in terms of risk and return potential. Your choice can actually be a simple one.
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When your outlook on an underlying security is bearish, meaning you expect it to fall in price, you will want to be using suitable trading strategies. A lot of beginner options traders believe that the best way to generate profits from an underlying security falling in price is simply to buy puts, but this isn't necessarily the case.
Buying puts isn't a great idea if you are only expecting a small price reduction in a financial instrument, and you have no protection if the price of that financial instrument doesn't move or goes up instead. There are strategies that you can use to overcome such problems, and many of them also offer other advantages.
On this page we discuss the benefits of using bearish options trading strategies, and some of the disadvantages too. We also provide a list of the ones that are most commonly used.
· Why Use Bearish Options Trading Strategies?
· Disadvantages of Bearish Options Trading Strategies
· List of Bearish Options Trading Strategies
Why Use Bearish Options Trading Strategies?
First, we should point out that purchasing puts is indeed a bearish options trading strategy itself, and there are times when the right thing to do is to simply buy puts based on an underlying security that you expect to fall in price. However, this approach is limited in a number of ways.
A single holding of puts could possibly expire worthless if the underlying security doesn't move in price, meaning that the money you spent on them would be lost and you would make no return. The negative effect of time decay on holding options contracts means that you'll need the underlying security to move a certain amount just to break even, and even further if you are to generate a profit.
Therefore, buying puts options is unlikely to be the best strategy if you are anticipating only a small drop in price of the underlying security, and there are other downsides too. This isn't to say that you should never simply buy puts, but you should be aware of how some of the downsides can be avoided through the use of alternative strategies.
There is a range of trading strategies suitable for a bearish outlook, and each one is constructed in a different way to offer certain advantages. An important aspect of successful trading is to match a suitable strategy to whatever it is you are trying to achieve on any given trade.
As an example, if you wanted to take a position on an underlying security going down in price but didn’t want to risk too much capital, you could buy puts and also write puts (at a lower strike) to reduce some of the upfront cost. Doing this would also help you offset some of the risk of time decay.
Another way to reduce the negative effect of time decay would be to include the writing of calls. You can even use strategies that return you an initial upfront payment (credit spreads) instead of the debit spreads that have an upfront cost.
Basically, bearish options trading strategies are very versatile. By using the appropriate one you cann't only profit from the price of the underlying security falling, but you also have an element of control over certain aspects of a trade like the exposure to risk or the level of investment required.
Disadvantages of Bearish Strategies
Although there are clear advantages to using bearish options trading strategies other than simply buying puts, you should be aware that there are some disadvantages too. Most of them usually involve a trade off in some way, in that there's essentially a price to pay for any benefit you gain.
For example, most of them have limited profit potential; which is in contrast to buying puts where you are limited only by how much the underlying security can fall in price. While this isn't necessarily a huge problem, because it's reasonably rare for a financial instrument to drop dramatically in price in a relatively short period of time, it does highlight that to get an extra benefit (such as limited risk) you have to make a sacrifice (such as limited profit).
In some respects, the fact that there are a number of different strategies to choose from is a disadvantage in itself. Although it's ultimately a good thing that you have a selection to choose from, it's also something of an extra complication, because it takes extra time and effort to decide which is the best one for any particular situation.
Also, because most of them involve creating spreads, that require multiple transactions, you will have to pay more in commissions. In truth, though, these disadvantages are fairly minor and far outweighed by the positives. The fact is if you can become familiar with all the various strategies and adept at choosing which ones to use and when, then you stand a very good chance of being a successful trader.
List of Bearish Strategies
Below is a list of the more frequently used strategies that are suitable for when you have a bearish outlook. There's also some brief information about each one: including the number of transactions required, whether a debit spread or a credit spread is involved, and whether it's appropriate for beginners.
You can get more detailed information on each one of these by clicking on the relevant link. If you would like additional help in choosing a strategy, then you can use our selection tool which you can find here.
Long Put
This is a single position strategy that involves only one transaction. It's suitable for beginners and comes with an upfront cost.
Short Call
Only one transaction is required for this single position strategy, and it produces an upfront credit. It isn't suitable for beginners.
Bear Put Spread
This simple strategy is perfectly suitable for beginners. It involves two transactions, which are combined to create a debit spread.
Bear Call Spread
This is relatively straightforward strategy, but it requires a high trading level so it isn't really suitable for beginners. A credit spread is created using two transactions.
Bear Ratio Spread
This is complex and not suitable for beginners. It requires two transactions and can create either a debit spread or credit spread, depending on the ratio of options bought to options written.
Short Bear Ratio Spread
This is fairly complicated and not ideal for beginners. A credit spread is created and two transactions are involved.
Bear Butterfly Spread
The bear butterfly spread has two variations: the call bear butterfly spread and the put bear butterfly spread. It's not suitable for beginners; it requires three transactions and creates a debit spread.
Bear Put Ladder Spread
This requires three transactions to create a debit spread. It's not suitable for beginners due to its complexities.
STRATEGY GIVEN @ 9.31 AM TO CHECK VISIT http://optioncallputtradingtips.blogspot.com/2021/03/bankbaroda-option-strategy-for-expiry.html
"BANKBARODA 75 CALL BOOK PROFIT NEAR 2.1 & BUY GIVEN @ 0.8 PROFIT OF 15210
BANKBARODA 72 PUT BOOKED PROFIT@ 1 BUY GIVEN @ 0.7 PROFIT OF 3510"
PROFIT 18720
INVESTMENT 17550
RISK :: RETURN
17550 :: 36270
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OPTION TIPS GIVEN
IN TODAY'S POST @ 9.21 AM TO CHECK VISIT http://optioncallputtradingtips.blogspot.com/2021/03/blog-post_23.html
INDUSINDBK 1000 CALL ACHIEVED TARGET 14
BUY GIVEN @ 12 PROFIT OF 1800
BANKBARODA 75 CALL ACHIEVED TARGET 1 BUY
GIVEN @ 0.7 PROFIT OF 3510
NIFTY 14500 PUT ACHIEVED
TARGET 45/55 BUY GIVEN @ 35 PROFIT OF 2250
7560 PROFIT IN 24240 INVESTMENT WITHIN JUST 45 MINUTES
NET RETURN TODAY 31800
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