Buying options — The myth of limited losses

Everyone who knows anything about options will tell you this. Trying to get rich buying options is like building that caste in the air. I have no idea what that woman is doing staring at the castle though. “Option buying is better than options selling. At least the losses are limited” For years, people have been … Continue reading Buying options — The myth of limited losses

This one change can make you a profitable trader

The fundamental reason why retail investor loses money in Options trading is this: Retail investors are buying options most of the times instead selling options. Surprised? Well, yes, as surprising as it sounds, that is the number 1 reason. So if you want to dramatically improve your trading fortune, just do one thing: Decrease buying … Continue reading This one change can make you a profitable trader

Which Strike to Choose for an Options Trade?

Here is a video attempt to answer the most important question for options traders. We hope you enjoy this! https://youtu.be/tr-tJlz9RAw If you would like to find out the best option to trade for your view, from a list of thousands of complex strategies like calls, puts, call spreads, put spreads, straddles, strangles, iron condors, iron … Continue reading Which Strike to Choose for an Options Trade?

7 Sins of Options Trading — Part 2

4. Not Selecting the Right Strike Price NIFTY is at 10000. NIFTY future is at 10020. Expiry is in 10 days. Scenario 1 You think NIFTY future will go to 10090 in 4 days. Which call option will you buy? 10000, 10050, 10100, or something else? Return on Investment for options of different strikes 9900 Call … Continue reading 7 Sins of Options Trading — Part 2

7 Sins of Options Trading — Part 1

1. Buying options with a lot of money 1. Buying options with a lot of money The biggest mistake of all times. This often ends up in investors losing a big part, if not all, of their capital. NEVER do this. People do this because: They think they can make some quick money They lost big money … Continue reading 7 Sins of Options Trading — Part 1

Buy Put, Or Sell Call?

You think a stock, say Infosys will move down. Options expire in 30 days Here is the question. Buy a put paying the premium, or sell a call and receive the premium? Assume that you will buy/ sell this option and hold until expiry. Break Even If you sell 900 Call, you will make 30 Rupees … Continue reading Buy Put, Or Sell Call?