Options Trading is risky and complex.
- People struggle to understand it
- and most people lose money in trading
This complexity and fear of loss is what prevents most people from trying option trading. And if you are afraid, you are right to be afraid.
Because you should be careful with your money.
So what do you do if you want to trade options? How do you change this “Risky and Complex” thing to “Safe and Easy”?
What if I told you there is an easy way to trade options where you will not lose more than 4-5 thousand rupees, even if the market moves 10, 20, 40 or 100% in the opposite direction?!
Yes, 4 to 5 Thousand Rupees max loss in a trade NO MATTER WHAT HAPPENS. That is safety and peace of mind.
Presenting Easy Options – The Easy Way to trade options
You can also watch this video to understand how to trade using Easy Options.
All you have to do is guess the market direction and Easy Options will automatically recommend easy, low-risk strategies to choose from! You can see the max profit and max loss of a trade, how much capital you need for a trade and the logic behind each trade.
And how about risks?
Risk in Options trading is like salt in food. If there’s too much of it, the food tastes bad and if there’s too less of it, then the food tastes bland. Similarly too much risk can bust your trading account and very less risk might not give the expected reward.
Taking the right amount of risk is very important. This is why we have classified the risk levels into three categories:
- Defensive – Less profit, more chances of success
- Balanced – Moderate profits, moderate chances of success
- Aggressive – big profits, low chances of success
Let us take the example of a trade to understand this better. Let us assume that NIFTY will go up in current expiry, so I select Up over here.
As you can see, three strategies are recommended to me. The first one is defensive, the second one is balanced, and the third is aggressive.
If you look at the logic behind each strategy you will understand why they are given a particular risk category.
In the defensive category, it clearly states that you should take this trade only if you think that NIFTY will not go down and stay above 22373, which is 0.6% below the market price as shown here.
Here you are not betting that NIFTY will move up big time. You are betting that NIFTY will not go down much. And these are two very different trades.
Will not go down is the high probability way to take a bullish trade. Why? Because:
- If it goes up, you are right.
- If it does not go up but stays right here, then also you are right.
- And guess what? even if it goes down a bit you still make money.
- Only when it goes down significantly, you are wrong.
In summary, you are good as long as NIFTY does not go down much. Hence, the defensive risk category.
In this trade, the max loss might be higher than the max profit, but the chances of you making that profit is higher than in the other two trades.
Now let us look at the Balanced category trade:
Here, the logic states that you should take this trade if you think NIFTY will go above 22548, which is 0.2% above current levels but not much higher.
You expect that NIFTY will go up, but not so much. In other words, you are expecting limited bullishness. In this trade, NIFTY should move up to give you profit.
The chances of you making a profit are slightly lower compared to the defensive strategy. But you make more profits if you are right.
In the aggressive category, you strongly feel that NIFTY will go above 22628, which is 0.6% above current levels or beyond that.
Here you expect NIFTY to go up, and go up quite a bit. You are expecting a quick and strong upward momentum. So you can’t be just right, you have to be very right in a big way.
Thus, the chances of you making a profit is the lowest among the three strategies. But if you are right you will make a lot of money.
You can see here that as you move from defensive to aggressive, the chances of making profits decreases, and the profit amount increases if you are right. If you want to trade ultra defensively, then your chances of making profits are higher.
Chances are relatively lower when you take a balanced trade, and if you want to trade aggressively, then the chances of making a profit is the least among all 3 categories.
If you want to understand the trade being taken in detail, you can click on the ‘More Details’ button to see it.
You can understand the trade by reading the “How does this trade work” section and also track the payoff of the trade in the payoff chart.
You can also see the Breakeven Price – the price level at which you will be in neither a profit nor a loss, Quantity being traded, Expiry date of the contract, Max Profit, Max Loss and the Capital required to take this trade
If you want to execute this trade, all you need to do is click on the Trade button and it will take you to the order window to execute the trade.
If you don’t want to take this trade in real time but want to track how the trade performed, you can always add it to your Virtual Portfolios by clicking on the “Add to Virtual” button over here.
By doing this, you will be able to see how the trade would’ve performed had you taken it.
You will be able to see all these details and take trades the same way, if your market view is Neutral, or Bearish.
Apart from NIFTY, you can also trade in BANKNIFTY and FINNIFTY in the same way.
You can track the prices of these three indices from the charts over here.
And if you want to do all this in dark mode, you can simply enable it over here
Try it out and let us know what you think of it in the comments below