Questions to trade in options..plz help

Hi people !!!
I do trading in cash as well as futures.
Now i am interested in options particularly in nifty 50. Problem is that i dont know which strike price to select as i am new to options...
Can nebody explain with examples of nifty 50 as how will i get profit and or loss.....how to select strike price etc...

thanks in advance

dear,
click this link and study entire thread.

http://www.traderji.com/options/30597-low-risk-options-trading-strategy-option-spreads.html

http://www.traderji.com/options/28235-good-profit-hedged-nifty-positions-straddle.html

good luck,

sorry boss. those link dosent help me out. I m new to options trading

dear,
try this
http://www.optionseducation.org/default.jsp

Just help me out here

AS if nifty is trading at 5330 and at that moment i want to buy with the opinion as i will sold it as nifty reaches 5350.

1. I have 3 strike prices suppose 5300,5350,5400. Now which to select?
2. If i will sell at as price reaches 5350 now what will be my profit?
3. If it does not reach and nifty gerts down den wat will be the loss?

hello gaurav.

good to see your interest in options. let me answer your question.

btw there is no 5350 strike price... strike prices are in 100's .. like 5300, 5400, etc ...

first of all you have to remember one thing ... the farther the underlying (nifty) goes from the strike price, the option will become more or less valuable ... eg . a call goes up in value if the nifty goes higher than the strike price ... same way, a put goes up in value when the nifty goes lower ...

you can better understand if you read the basics on options ...

the price of the option is also effected by the days to expiration, volatility in the market.

i would recommend you to not trade options if your not prepared for it ... because the options loose value if the expiration day comes closer ...

coming to the second part of your question...

if you bought a 5300 Nifty contract on the day of expiration then it would cost you about 30 rs .... then when it reaches 5350 it would be worth around 50rs ..

but if you had bought the option with about a 1 month to go ... then it would cost you around 150 or so rs. and you could have sold it for about 160-165 rs ...


hmmm ... i am sure you'd be a bit confused ...
thats why, GO LEARN THE BASICS ON OPTIONS FIRST !!!

if your not really interested in learning the little basics there is .. .then you better not trade ...

I am intrested in learning fno.

I sold 100 Nifty at 5800 for a premium of Rs. 18. Now the market has moved up very high and the current premium is 83. So I'm sitting with a loss of 83-18 = Rs. 65.

Can you please answer my following questions?

a. I've pledged some shares of about 5 different companies to create limit for margins. Will the shares be sold by ICICIDIRECT for the losses or would they let me deposit money so that they will not sell them?

b. When will the losses be adjusted? Are the losses adjusted daily or accumulated till the expiry date? This means if the Nifty closes down below 5800 on the day of expiry, do I still make profit of the premium and the entire temporary run up does not have any impact to me?

You'll get a margin call. If u don't meet it your position will be squared off and shares sold to make up the deficit if u do not pay cash.

What were u thinking when you made this trade???

option seller are the smartest among the traders; I guess you must have thought way out(hedged) your position incase your trade go wrong