A Beginner's way to trade options.

[morgan2074]

Hello everyone.
I am new in this trading field and dont know much about how to trade to earn better profits, So please suggest me some website that helps me in earn more.

Trade options

 

[pradeep24s]

Hi all,

I am a beginner in options. I find this forum really helpful and am touched by the generous advice of many people here.

I have a doubt in the below trade

Today Nifty is around 5250. If i sell the Nifty CALL for 5500 @ 17 rupees.
Assume from the Technical Analysis i am almost confident that Nifty is never gonna cross 5500(though i know one can never be 100% sure )

Say at the end of expiry Nifty closes below 5500. i dont close my call and it expires automatically.

Then my profit would be 17*lot size - brokerage.

Am i correct here?

I need your valuable advice here

Thanks,
PR

 

[sadiq]

Hi all,

I am a beginner in options. I find this forum really helpful and am touched by the generous advice of many people here.

I have a doubt in the below trade

Today Nifty is around 5250. If i sell the Nifty CALL for 5500 @ 17 rupees.
Assume from the Technical Analysis i am almost confident that Nifty is never gonna cross 5500(though i know one can never be 100% sure )

Say at the end of expiry Nifty closes below 5500. i dont close my call and it expires automatically.

Then my profit would be 17*lot size - brokerage.

Am i correct here?

I need your valuable advice here

Thanks,
PR

you r correct

 

[rrmhatre72]

Hi all,

I am a beginner in options. I find this forum really helpful and am touched by the generous advice of many people here.

I have a doubt in the below trade

Today Nifty is around 5250. If i sell the Nifty CALL for 5500 @ 17 rupees.
Assume from the Technical Analysis i am almost confident that Nifty is never gonna cross 5500(though i know one can never be 100% sure )

Say at the end of expiry Nifty closes below 5500. i dont close my call and it expires automatically.

Then my profit would be 17*lot size - brokerage.

Am i correct here?

I need your valuable advice here

Thanks,
PR

You are correct in your understanding.
Hedge it by selling 4800PUT @18.
If market expire between 4800 to 5500 then you gain both way.
If market goes above 5500 then you will gain in 4800PUT & loose in 5500CALL. (OR vice versa)
If you keep proper stoploss then you will not loose money.

Statergy is nicely explained by JVBlogger in following thread.
http://www.traderji.com/options/36103-picking-up-nickels-front-steamroller-10.html#post449072

 

[pradeep24s]

You are correct in your understanding.
Hedge it by selling 4800PUT @18.
If market expire between 4800 to 5500 then you gain both way.
If market goes above 5500 then you will gain in 4800PUT & loose in 5500CALL. (OR vice versa)
If you keep proper stoploss then you will not loose money.

Statergy is nicely explained by JVBlogger in following thread.
http://www.traderji.com/options/36103-picking-up-nickels-front-steamroller-10.html#post449072

Thanks for your reply. I have one more question.

Say i am not buying back the sold call option. Wat if the my option is excerised? What would happen then?

 

[vivek.birhade]

can anyone guide me how to trade in options

 

[vivek.birhade]

options i am biank i wanna learn help?????

 

[rrmhatre72]

Thanks for your reply. I have one more question.

Say i am not buying back the sold call option. Wat if the my option is excerised? What would happen then?

If your call is OTM at expiry then no need to suare off.
But if it is ITM then you will have to sqaure it off or you will have to settle it in cash for Nifty.

 

[anupvishy]

Hey guys i have a query , I am using ICICI direct for trading , wat is the difference between square off and exercise . I have bought a put option and presently in the money option , i have a confusing whtr to square off or exercise my option........wat is the main diff with these ???

 

[MurAtt]

Say u hv bot a 60PA for a certain stock @1/- when the cmp was 62.40.
Now the cmp is 59.25 and the cmp for the option is (or would be) Rs. 2.55.

If u square off then you would get Rs 2.55 x lot size as credit into your account.
If u exercise then you would get 60-59.25 x lot size as credit into your account.
Subtract STT.
STT on the square off would be relatively extremely cheaper than exercise.

On the last day of the series i.e. expiry day, you cannot exercise as any open positions in Options is automatically exercised by the exchange after EOD.

Index Options are non-exercisable i.e. they are European in nature CE/PE (E stands for European) and stock options are exercisable and American in nature CA/PA (A stands for American)