OPTION TRADING TIPS

Friday 28 May 2021

NIFTY FUTURE & NIFTY OPTION (NFO) ACHIEVED 1ST TARGET

CALLS GIVEN IN TODAY'S POST TO CHECK VISIT http://optioncallputtradingtips.blogspot.com/2021/05/option-call-put-tips-for-28-may-2021.html

NIFTY FUTURE ACHIEVED OUR 1ST TARGET 15500 BUY GIVEN @ 15450 PROFIT OF 3750

NIFTY 15400 CALL ACHIEVED OUR 1ST TARGET 145 BUY GIVEN @ 120 PROFIT OF 1875

PROFIT 5625

FOR SUCH MORE FUTURE OPTION TIPS JOIN US ON WHATSAPP 9039542248

NIFTY FUTURE & NIFTY OPTION FOR 28 MAY 2021

BUY NIFTY FUTURE 2 LOTS ABOVE 15450 TARGET 15500/15570 STOPLOSS 15400

BUY 2LOTS NIFTY 15400 CALL @ 120 TARGET 145/1750

FOR SUCH MORE FUTURE OPTION TIPS JOIN US ON WHATSAPP 9039542248

Thursday 27 May 2021

OPTION CALL PUT TIPS ROCKS

OPTION CALL PUT TIPS GIVEN IN TODAY'S POST TO CHECK VISIT http://optioncallputtradingtips.blogspot.com/2021/05/option-call-put-tips-for-27-may-2021.html

MANAPPURAM 155 PUT ACHIEVED TARGET 2.5 BUY GIVEN @ 1.5 PROFIT OF 6000

NIFTY 15250 PUT 27 MAY ACHIEVED 1ST TARGET 35 BUY GIVEN @ 15 PROFIT OF 1500

INVESTMENT 11250

NET PROFIT 7500

NET RETURN 18750

FOR MORE OPTION CALLPUT CALLS JOIN US ON WHATSAPP 9039542248

OPTION CALL PUT TIPS FOR 27 MAY 2021

BUY 1 LOT MANAPPURAM 155 PUT 27 MAY @ 1.5 TARGET 2.5

BUY 2 LOTS NIFTY 15250 PUT 27 MAY @ 15 TARGET 35/60

FOR MORE OPTION CALLPUT CALLS JOIN US ON WHATSAPP 9039542248

Wednesday 26 May 2021

FUTURE & OPTION CALL PUT TIPS ROCKS

CALLS GIVEN IN TODAY'S POST TO CHECK VISIT http://optioncallputtradingtips.blogspot.com/2021/05/blog-post_26.html

TCS FUTURE ACHIEVED 1ST TARGET 3145 BUY GIVEN @ 3133 PROFIT OF 3600

NAUKRI FUTURE ACHIEVED 1ST TARGET 4525 BUY GIVEN @ 4470 PROFIT OF 6875

BANKNIFTY 34700 CALL ACHIEVED 1ST TARGET 370 BUY GIVEN @ 270 PROFIT OF 2500

NET PROFIT 12975

FOR LIVE OPTION CALL PUT & STOCK FUTURE TIPS JOIN US ON WHATSAPP 9039542248

FUTURE & OPTION TIPS FOR 26 MAY 2021

"BUY TCS FUTURE 2 LOTS ABOVE 3133 TARGET 3145- 3160 STOPLOSS 3121 "

"BUY NAUKRI FUTURE 2 LOTS ABOVE 4470 TARGET 4425- 4590 STOPLOSS 4415"

"BUY 2 LOTS BANKNIFTY 34700 CALL @ 270 TARGET 370/470"

FOR LIVE OPTION CALL PUT & STOCK FUTURE TIPS JOIN US ON WHATSAPP 9039542248

Saturday 22 May 2021

RULES FOR THE OPTION TRADERS WITH SMALL INVESTMENT

FOR LIVE OPTION CALL PUT TIPS JOIN US ON WHATSAPP 9039542248

Nifty has surged in 2021 , about 100% from the swing low of 2020. The Indian market in last one year has also witnessed a huge number of additions in trading accounts due to more time available with people working from home to allocate to trading. Most of these traders are newbies and often come with small capital to be deployed.

Any options trade of less than Rs 2,00,000 is termed as small capital. And since small capital can deploy low capital strategies, we will consider only buying options which could be both calls and puts.

Options trading, unlike futures or cash market trading, has a lot of complexities and hence I’ll list down few quick fixes to know for a guided start.

Position Sizing

Let us start with how much capital you should deploy. Generally, newbies make a mistake of treating options like stocks. Options are wasting assets and have a very small shelf life mostly a month for Indian markets as expiries beyond that aren’t liquid.

This means that deploying full capital would mean blowing up complete capital in just a few months and sadly this is the fact where within 6 months most of the traders blow up their accounts. So, it is important to know how much capital to deploy in each trade.

To understand the concept of why we need position sizing, consider this example. Let’s say we are flipping coins to predict the outcome of head or tail, we know with enough number of iterations eventually it will be 50:50, but what if you predict Tails and Head pops-up 5 consecutive times? Will you have enough capital to sustain that bet? This is exactly where position sizing helps.

For small accounts, I recommend a per trade allocation of 5% with an overall allocation of 10% at any given point of time. That means with a capital of Rs 2,00,000 one should allocate no more than Rs 10,000 each trade and two parallel trades can be opened at a time. This will help you sustain consecutive losses.

Setting the Holding Period

Trading single options should have a defined maximum holding period. A common mistake new entrants make is holding the trade for too long which deteriorates the probability of making money due to theta decay outrunning the probability of profit. Single Option trades should be extremely short term so participating in breakout / breakdown zones and quickly moving out of the trade should be the intention.

If you want to carry trades, then the maximum holding period should be 3 days but in expiry week this should come down to intraday. So, one needs to follow the time stop loss and exit without relying on hope.

Pre-calculate Stops & Targets

Forecasting studies are generally conducted using the underlying instruments and its extremely important to align your option trades to those targets and stops.

Using an Option Calculator which is generally available online, can help converting your underlying stops and targets to option stops and targets. Pre-calculate the option level using underlying forecast levels and time. This will help your trades avoid whipsaws due to inaccurate calculations.

Avoid stocks in news

Often new investors jump in heard trading i.e. stocks which are hot in news. Generally, as market has a unique way of predicting the impact of news, what might sound positive news may have been accounted for in the price or market may have a different prediction methodology trapping the price on a reverse direction. Stock valuations doesn’t matter much to options trading as the time scale for these trades are extremely short term and things are more led by demand and supply in short term.

Avoid unknown events

Another general mistake is to trade events where outcomes are un-known, that is very close to gambling. Remember most of the people lose in a casino as they enter with an intention to gamble and have fun.

If you treat your trading like a business, you will never want to enter a trade which leads to a gamble. So, avoiding event days like Monetary policies, upcoming stock results, fiscal policies, etc. is generally a good idea. In these events, even if your predictions are right still you may lose to volatility.

Limit number of open trades

Managing multiple trades simultaneously is a difficult task, so before adding a trade always ask yourself is there an open trade which can be replaced? If yes, choose to replace than to increase the overall bet. I recommend not to hold more than 2-3 open trades at any given time.