Why Use Options?
Options provide traders with:
Leverage: Control a large position with a smaller investment.
Flexibility: Create strategies for any market scenario.
Risk Management: Hedge against adverse price movements.
Income Generation: Sell options to collect premium.
Simple Options Trading Strategies
These strategies are suitable for beginners. They involve limited positions and simple risk-reward profiles.
Long Call
Outlook: Bullish
How it works: Buy a call option when expecting price to rise.
Risk: Limited to premium paid.
Reward: Unlimited upside.
Example: Stock trading at ₹100, buy a call with strike ₹105 for ₹3 premium. If stock rises to ₹120, profit = (120–105–3) = ₹12.
Long Put
Outlook: Bearish
How it works: Buy a put option when expecting price to fall.
Risk: Limited to premium paid.
Reward: Potential profit increases as price drops (limited to strike price minus premium).
Example: Stock at ₹100, buy a put strike ₹95 for ₹2. If stock falls to ₹85, profit = (95–85–2) = ₹8.
Covered Call
Outlook: Neutral to mildly bullish
How it works: Own stock and sell a call against it.
Risk: Downside risk in stock, upside capped at strike.
Reward: Earn premium income.
Protective Put
Outlook: Hedge
How it works: Own stock and buy a put to protect downside.
Risk: Limited (stock downside hedged).
Reward: Unlimited upside, protection from losses.
Options provide traders with:
Leverage: Control a large position with a smaller investment.
Flexibility: Create strategies for any market scenario.
Risk Management: Hedge against adverse price movements.
Income Generation: Sell options to collect premium.
Simple Options Trading Strategies
These strategies are suitable for beginners. They involve limited positions and simple risk-reward profiles.
Long Call
Outlook: Bullish
How it works: Buy a call option when expecting price to rise.
Risk: Limited to premium paid.
Reward: Unlimited upside.
Example: Stock trading at ₹100, buy a call with strike ₹105 for ₹3 premium. If stock rises to ₹120, profit = (120–105–3) = ₹12.
Long Put
Outlook: Bearish
How it works: Buy a put option when expecting price to fall.
Risk: Limited to premium paid.
Reward: Potential profit increases as price drops (limited to strike price minus premium).
Example: Stock at ₹100, buy a put strike ₹95 for ₹2. If stock falls to ₹85, profit = (95–85–2) = ₹8.
Covered Call
Outlook: Neutral to mildly bullish
How it works: Own stock and sell a call against it.
Risk: Downside risk in stock, upside capped at strike.
Reward: Earn premium income.
Protective Put
Outlook: Hedge
How it works: Own stock and buy a put to protect downside.
Risk: Limited (stock downside hedged).
Reward: Unlimited upside, protection from losses.
Hello Everyone! 👋
Feel free to ask any questions. I'm here to help!
Details:
Contact : +91 7678446896
Email: skytradingmod@gmail.com
WhatsApp: wa.me/7678446896
Feel free to ask any questions. I'm here to help!
Details:
Contact : +91 7678446896
Email: skytradingmod@gmail.com
WhatsApp: wa.me/7678446896
Penerbitan berkaitan
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.
Hello Everyone! 👋
Feel free to ask any questions. I'm here to help!
Details:
Contact : +91 7678446896
Email: skytradingmod@gmail.com
WhatsApp: wa.me/7678446896
Feel free to ask any questions. I'm here to help!
Details:
Contact : +91 7678446896
Email: skytradingmod@gmail.com
WhatsApp: wa.me/7678446896
Penerbitan berkaitan
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.