When I was in Singapore a few months earlier, the local investor association had organized a workshop on options trading. A broker and coach explained the basics of options trading, such as buying call options, selling put options, strike price, and hedging. He explained how option traders can earn stable, almost “risk-free, income by taking” calculated risks for individuals. These market evangelists have the ability to turn you into a believer in a couple of hours.
In a trading world, buying options is the simple tool where you can slowly lose money. One trade will give you profits, place 3 trades that will take all your capital, only 0.5% of option buyers with skills can survive. We have now restricted the conversion of positions from MIS (intraday) to NRML (overnight) if I had bought options using the MIS product type with the idea that it was an intraday trade. It will help me plan the trade, especially after 12pm on Thursday, as I start trading a lot of scalping from 12 to 3.20 p.m.
The thrill of trading options and the mistakes of not having proper risk management led to huge losses and the elimination of my capital. If you trade options with more than, say, even 1% of your capital, it's important to have a stop loss set. Buying OTM call options seems to be a good starting point for new option traders because they are low-cost. Trading options that are based on indices can partially protect you from the huge movements that individual news can create for individual stocks.
If you plan to buy an option during the earnings season, an alternative is to buy one option and sell another, creating a spread. Your trading terminal has an interface to check if the option is undervalued or overvalued according to the Black and Scholes model. Sir, I love the way you care about the retail category and especially the need to follow risk management when trading options. Although selling options to collect cash seems safe, selling naked or overdraft options is a risky strategy because there is unlimited risk.
To make money with options trading, you'll need to set price alerts and keep a close eye on the market to see when your trade becomes profitable. In September, Vijayendra Rao received text messages from a company based in Surat, offering to help him make big profits through options trading. Trading options can be a great strategy for diversifying your portfolio, limiting risk, and generating profits when executed well. Options traders need to actively monitor the price of the underlying asset to determine if they are in the money or if they want to exercise the option.
If you are taking a directional view of call options, always trade with a monthly maturity, you will have much more time value and therefore a higher chance of making a profit compared to weekly trading.