Riskless profit

[Trader101]

Hi all,
i am new to this community, I am learning options for the last one year, is there any options strategies with that i can generate 10% profit every month with out any risk. I heard through some of my senior traders that people create options strategies to do this.

 

[angelnish]

1. Read a good options primer. There are many good ones out there. By choice, I would choose Options Plain and Simple by Lenny Jordan. Then follow that up with "Option Volatility and Pricing" by Sheldon Natenberg.
2. Use the resources of this site and the internet. There is an excellent free on-line training course run by 21st Century Education
3. Learn how to construct and interpret profit/loss pay-off diagrams. Use appropriate software. There is an excellent free plug-in to Excel97 and higher, Options Strategy Evaluation Model available from Peter Hoadley.
4. Paper-trade using free 20 min delayed data from Liffe for UK share and index options, or CBOE which is the equivalent site for share options in the US.

 

[psvaja]

Hi all,
i am new to this community, I am learning options for the last one year, is there any options strategies with that i can generate 10% profit every month with out any risk. I heard through some of my senior traders that people create options strategies to do this.

Let me disapoint you. It is very very hard to even generate 2% profit on your capital every month wituout any risk.

 

[Trader101]

No your wrong. I have seen people creating 5% profit without any risk. Just by placing their strategy on th first trading day and get minimum of 5% on the expiry day

 

[paulmathewmac]

Can you tell us what this ' riskless strategy ' is?

 

[Trader101]

What ever the nifty movement is we will get profit.

 

[vssoma]

What ever the nifty movement is we will get profit.

check this thread

 

[DanPickUp]

Dear Trader101

Talking about non risk in trading has nothing to do with trading reality. Even low risk is risk. No risk only exist when you are in a profit you no more can lose or when you do not take a trade. What ever trade or option strategy you implement in the market: You take a risk at this moment your money is invested in the real market.

By creating option strategies or better told: Using different once of them in a whole strategy, we take risk at the moment we enter our first leg. Even if we enter two legs or four legs in more advanced option strategies, we are at risk. There is no go around it. It just not exists.

That risk can be reduced by implementing the trade or strategy by using defined and tested entry rules ( TA, Tape reading, Pure price action or what so ever ) which include proper Money Management rules include the pre defined exit rules.

Before you enter the market, your first MM rules come in to play ( Amount you use for your entry trade ). At the moment your money is in the market, you follow your pre defined stop loss rules and if the stop loss is not touched by the market, again your follow up money management rules and your follow up stop loss rules come in to play.

If you follow those rules, many times you will get to a profit point in which you can make further decisions or use your pre defined exit ruels. As you are in profit, your decision can be a risk free decision. Any decision until here is touched by risk.

Good trading

DanPickUp

 

[Ulaanxuu]

I agree! Trading without risk is only for disneyland! However, trading some option strategies (especially credits spreads) is much lower risk than straight stock investing, and much easier too.