naked option trading?

Subhadip

Well-Known Member
#42
So today all can understand theta.is not it.

Market not moved...but both call as well as our price deceased...

So hopefully theta is clear to all by now.

Theta is time value..we call it time decay...

Now see October series and November series..

Time decay most in October series..whereas less in November series...
 

headstrong007

----- Full-Time ----- Day-Trader
#45
Last two data clearly shows why options trading is harder than future trading.
In future, only the right direction is enough for profit, but in option, u need both direction and timing right.
All of the PE are in loss even if Nifty is down 0.23%. So even the direction is right, there is no guarantee of profit unless the move is significant enough.

******************
The easiest way to make the profit with options, make THETA your best friend. ;)

THETA - Time decay the enemy number one for the option buyer. On the other hand, it’s usually the option seller’s best friend. Theta is the amount the price of calls and puts will decrease (at least in theory) for a one-day change in the time to expiration.

Assuming you are already a successful future trader, u know the overall trend or can spot the ranges, i.e DELTA-the direction of the price movement is not your enemy too. :)

**********
But, continuous profiting from buying options is the ultimate mastery in trading, which makes a trader proud! It has huge potential to increasing capital very fast. But, it is also the hardest thing in trading to manage the risk continuously with buying options. Always be careful! Trying to capture FIRST the hardest skill in trading, 'naked option buying' always hurts!!! Option buyers generally earn a lot and give it back to the market soon...Ultimately most of them get Babaji ka Thullu!

As a weekly option trader, this is the post to aware all beginners, that option buying is the ultimate mastery in trading.. the last step...don't try it first. First make delta your friend, ie understand the price direction. Even, after that, u need a long way to go...when THETA is your enemy...:clown: U have to make another friend GAMMA, the acceleration...power to identify the momentum trades...

Long CE-PE option trading is much difficult than simple swing intra/swing future trading. But because of low capital required and maximum limited risk.. more and more traders attracted to it.. Actually, it is The Slow Poisoning for beginners
I know very few beginners listen to such advice.. They try to test the forbidden water. They provide the much-needed liquidity in the system and the food for option writers.
 
Last edited:
#46
ha ha ha
As if the future premium remain the same or keep on rising every day, through out the month.
Its greed and only greed because of which, an option trader fails.

Its only in last week that option premium decreases fast, otherwise during first 3 weeks, you wont feel it even, if you are in profit. (BTW I am talking about monthly options and not weekly options)
 

headstrong007

----- Full-Time ----- Day-Trader
#47
#50
my only aim to catch 5-5 points 2 trades in Nifty option.
(but looking at these Big Theory,options looks way much difficult)
Kumar bhai
It means you trade nifty futures.
If so how much you are getting daily on how much investment.
 

Similar threads