Low Risk Options Trading Strategy - Option Spreads

[AW10]

Hi AW10/Lazytrader,

I had a conversation with Dan regarding learning of Option trading and am grateful to him for his reply.

I want to learn options trading. Do we have to be well versed with the equity trading. To be frank I have a year and half exp in swing trading that too not a active participant.

AW10,Lazytrader, Kindly inform me the ways to learn options from beginning that too very basics. Have gone through the websites provided earlier and was able to grasp some of the stuffs. However, will appreciate if explained in detail step to step to gain the knowledge of options trading.

Thank you for your time

tvrssvk, Appreciate your willingness to learn options properly. While replying to this, I thought that this could be a good post to put in front of this thread so have placed the content on one of the reserved post..#7. The link is here.

http://www.traderji.com/options/305...ading-strategy-option-spreads.html#post333547

Hope you won't mind this little liberty that i took here.

Feel free to raise any question.

Happy Trading

 

[tvrssvk]

Here comes the perfect answer from the Gem.

Thanks a ton!!!!!:clap:

 

[tvrssvk]

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[columbus]

In TT platform, you will have to add the options that u want to monitor.
I..e open new market watch tab, add scrips (press insert key), pop window will appear
where go to Derivaties tab and select relevent details.. and at the end, press enter key to add select option strikes on your market watch..

Happy Trading

Dear AW10,

My trade tiger is not showing all the strikes of nifty as well as other scripts. Though its not proper place i couldn't restrict myself knowing you are also using TT.

Please help.

The problem in TT is that we have too less calls.

 

[addme_1]

Columbus explained it fully. Every strike call as well as put is not present. its cubersome to switch between browser and TT.:fatigue:

 

[lazytrader]

The problem in TT is that we have too less calls.

So you can;t buy a 5000 or 5100 call?

 

[addme_1]

we can. but only through browser.

And can watch movements in browser only.

At present TT is not suitable for options, if this is the case with everybody

 

[lazytrader]

5000 PE adds 155% (2mil)
46,47,48,49,5000 CE shed 2millin in OI

5100 PE adds 370k in OI
5100 CE adds 260k in OI

5000+ expiry looks certain, 5100 is split down the middle - yesterday 5100 CE OI was 2mil and added 260k today but 5100 PE is OI build up is very rapid with 500% increase today adding 378k today. currently OI at 5100 PE - 500k

 

[Bhuppi]

can I get an example for BULL SPREAD & BEAR SPREAD at NIFTY 4900 spot level?

 

[simu2004]

Hi,

Please confirm if below are the correct examples for Bear Spread & Bull Spread

Bull Spread:view is that market will remain above 4900
Buy 4700CE=357 (for Oct series - as of 18th Sept)
Sell 4900CE=227 (as of 18th Sept)
Net Cost=357-227=130
Max Risk=130 if expiry is below 4700.
Max Reward=200
Net profit = 200-130=70
BEP=4700+130+2=4832

Bull Spread:view is that market will remain above 5100
Buy 4900CE = 227
Sell 5100CE = 121
Net Cost= 94
BEP=4900+94+2=4996
Net Profit = 200-96=106

Bear Spread - view is that market will stay below 4900
Buy 4900PE - 136
Sell 4700PE - 75
Net cost = 61
Max Risk = 61
Reward=200
BEP=4900-61=4839+2=4841
Net Profit=200-61=139

Bear Spread - view is that market will stay below 5100
Buy 5100PE = 230
Sell 4900PE = 136
Max risk= 94
BEP=5100-94=5008
Net Profit=200-94=106