A Beginner's way to trade options.

[AW10]

abigbull, plz chk out my thread on "low risk option trading.." where I have addressed this topic in detail. You maynot be able to hedge and reduce the risk to ZERO. but you can certainly protect the position from time and volatility risk.. to some extent. and still take a directional position.

Happy Trading

 

[maheshrade]

I sq off my strangle AW - sold the put at 73 (the strangle was bot at 59/-) and then at 4520 sold the call at 6.5.
Yes high was 96 fro the put BUT that I feel would have been for maybe some seconds and actual trade would not have been done unless PRE-FED order would have been there. Right?
Thereafter bot 1x4500PE for 2morrow at fag end of the day - Pure gamble BUT mkt was looking weak so took the risk ... Hero ya Zero

Hallo Sir,I am confused about option strategy.I know only buy put,call.But to stand any option strategy how can I write call or put & buy another call or put at a time.i have my online terminal But it cant accept write a call or put.Plz explain if possible.

Rgards,
Mahesh.

 

[AW10]

Mahesh. Writing CALL / PUT is nothing but Selling CALL/PUT. It is equivalent of Short selling the Option that u don't own.

The way u execute buy orders, just execute the sell order and u are option writer.

Regarding strategy - it is nothing but combination of 1 or more option transaction and referred with some name.
So if u read Strangle strategy - it is nothing but Buying a CALL and Buying a PUT.

Hope this clarifies your basic doubt. For more info, please read more about options.
It is leveraged instrument but very powerful.. So if u learn how to use it appropriately, you can change your trading performance beyond what u can think of now..

Let me tell u something from my experience in options - Buying CALL/PUT strategy is one of the most riskiest and low probablity of success strategy.
But people use it cause they come from background of BUY STOCK.

Happy Trading

 

[DanPickUp]

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[lazytrader]

One more is http://www.optionsuniversity.com/

:thumb:

 

[VIKAS 21]

Sir

i have 2 lots of hdil [email protected] now [email protected]

and one lot of hdil [email protected] trading @1.30

market price=340
what should i do now?

 

[VIKAS 21]

Sir

i have 2 lots of hdil [email protected] now [email protected]

and one lot of hdil [email protected] trading @1.30

market price=340
what should i do now?

 

[imgkg]

what should be the minimum capital to start trading option?

 

[findvikas]

what should be the minimum capital to start trading option?

If you are option buyer then it will be

premium price x lot size

for buying 1 lot of Nifty 5000 call of Nov.

101.55 x 50 = 5077.5/-

same for December will be

206 x 50 = 10300/-

When it comes to selling options its a different ball game, my advice is don't do it unless you know what you are doing. For Information sake, you need to block 12-15% of cash margin amount for selling 1 lot of Nifty call or put

It would be very much like Buying or Selling 1 lot of Nifty Future

 

[meetvenkatmahesh]

Hello All,

I am very new to Options Trading. Can you please explain few basic questions below:

Here I have taken 2 days of Suzlon information. 13th and 17th NOV.

On 13-NOV-09 SUZLON: 67.40 (Current Price)

BUY CALL@ 65 PREMIUM= 5.55 * 3000 QTY = 16650 26/11/2009 EXPIRE
BUY CALL@ 70 PREMIUM= 3.05 * 3000 QTY = 9150 26/11/2009 EXPIRE
BUY CALL@ 75 PREMIUM= 1.65 * 3000 QTY = 4950 26/11/2009 EXPIRE

On 17-NOV-09 SUZLON: 73.10 (Current Price)

BUY CALL@ 65 PREMIUM= 9.00 * 3000 QTY = 27000 26/11/2009 EXPIRE
BUY CALL@ 70 PREMIUM= 5.25 * 3000 QTY = 15750 26/11/2009 EXPIRE
BUY CALL@ 75 PREMIUM= 2.75 * 3000 QTY = 8250 26/11/2009 EXPIRE

On 13th NOV, Suzlon running@ 67.40/-.
On 17th NOV, Suzlon running@ 73.10/-.

1. On 13th NOV, Suzlon running@ 67.40/-. So can I buy a Call@65 though the current price is [email protected]/- which is hight than the strike price? Will it be having any advantage if I buy a Call where the Strike Price is less than the Current Price?

2. Lets say on 13th I did BUY CALL@ 65 PREMIUM= 5.55 * 3000 QTY = 16650 26/11/2009 EXPIRE. Remember Suzlon running@ 67.40/-.

Will I get profit of 3.45/- premimum on each share if I sell the call on 17th?

3. By looking on both dates, can you explain me the best option that would have taken on 13th to get good profit?

4. I have account in ShareKhan, but not sure how to do the Options Trading. Can anybody provide 2 screen shots on how to buy a call and sell a call pls pls?

Thanks,
Venkat