Sure shot calls : Some experiments

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Experiment VI.

Buy HPCL Futures @ current level 340 (+/- 1%)

Target : (i) 365 (ii) 375

Stop Loss : 317 (by closing)


Note : This call is for paper trading only.
Target ii is also achieved HPCL Fut makes high of 384 and currently trading @ 381.
 
Hello Dev Sir

I do not understand Futures & Options as of now and hence no paper trading or real trading.

If you can give some experiments in Intraday Cash Stocks segments, that could help me and people like me.

With thanks
Anupam
 

rajputz

Well-Known Member
Hello Dev Sir

I do not understand Futures & Options as of now and hence no paper trading or real trading.

If you can give some experiments in Intraday Cash Stocks segments, that could help me and people like me.

With thanks
Anupam

Futures A financial contract obligating the buyer to purchase an asset
(or the seller to sell an asset), such as a physical commodity
or a financial instrument, at a predetermined future date and
price. Some futures contracts may call for physical delivery of
the asset, while others are settled in cash. Futures can be
used either to hedge or to speculate on the price movement
of the underlying asset. For example, a producer of corn
could use futures to lock in a certain price and reduce risk
(hedge). On the other hand, anybody could speculate on the
price movement of corn by going long or short using futures.
The primary difference between options and futures is that
options give the holder the right to buy or sell the underlying
asset at expiration, while the holder of a futures contract is
obligated to fulfil the terms of his/her contract.

Options A privilege, sold by one party to another, that gives the buyer
the right, but not the obligation, to buy (call) or sell (put) a
stock at an agreed-upon price within a certain period or on a
specific date.



future is no different then the equity....the only noticable difference is that it has a particular lot that you can take with expiry date on last thursday of the month. you can both buy or sell the future. also u have to pay only some percentage of the money(as directed by SEBI) like 20% 21% etc. the brokerage charged on futures is also less, the reason being that the future contract is just virtual settlement of shares or we can say that only money is transfered but the shares are not delivered. you can btst it or just intraday. the future you buy can be taken of any date like last thursday of this month, next month or coming month. the volatility of future of this month is the highest and decreases for the next month.

In options we only have to pay the particular premium amount when we call option. our total loss is that premium and the gain is unlimited. the plus point of option is that the gain is unlimited and the loss is limited. for example we have a call of RPOWER at 120
with current premium at 35.

this means that you will have to pay 35 rs. per share on lot of RPOWER. that is your investment. once the price reaches 120+35=155 and moves above that you will be gaining profit. like if the price reaches 160 then you gain 5 rs. per share. Lot of RPOWER is of 2000 shares. and this one is real example. day before yesterday the call was at 120 with premium 35. next day the price reached 161. so calculate the profit of 6 rs. on 2000 shares....viceversa for put options....this is just practical theory of options that i know. i havent myself worked on them so there might be many things that are missed cause option is a vast concept
 
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