#Technical #Analysis Use करके Options में कैसे Trade करे ? | #Options #Trading - 8 | #Learn2Trade 40
Welcoming you all to Learn2Trade session #40 and Options Trading session #8 My name is Vivek Bajaj and I’m teaching trading to you and Annapurna Ji. Hello sir. -What’s up? -All good sir. -Fantastic. So, options trading is going on. Are you looking at Options or not? Yes sir. Looking at Nifty and tracking Reliance a bit. -good. So, you are looking at Option Chain of NIFTY. -Yes. - And Option chain of Reliance. -Right. So, as I said last time, Options is a thing that will take time. So, it’s not that we have to dive into it.
But it’s good to know options and gradually work slowly in options is good. -Okay. But as a buyer of option or seller of option? – Sir, I’m more looking for a seller but I also know my constraints Because I don’t have that much of capital. So, I’m trying to do where I can do the best. -You can do Option Buying too. But if you remember I had told you that if you trade in Options then you have many options and you can actually do spread-trading Meaning taking one and selling other, then margin requirement would be less. You understand the concept of margin? Yes sir. - When you do options selling you have to give the whole margin which is equivalent to future’s margin. And when you buy, you just have to give the premium because there is no risk, you have bought it meaning you have long the premium but when you do spread trading taking one and selling other then you get the spread benefit due to which margin is less.
So, people with low capital base Spread strategy in Options is a desirable work. -Okay. Today in the video we will discuss, not in detail, about advanced strategies. Till now Annapurna, I have taught you basic of Options that we have covered in the old videos Synthetic option contracts how we can play Boom-recession through Options Taught you straddle-strangle in the last video. Now see, after that there are many advanced strategies. Like Box Strategy is one, Butterfly, Condor, Iron-Butterfly, Iron-Condor, Strip, Strap, Ration Spread These all are slightly advanced strategies. Then you can learn each advanced strategy here.
There is no limit in learning options and this is not a detailed option training session, This is meant for people like you who would like to get the hang of options, try with few trades And if they feel that this is something I want to pursue then you have to do more learning in advance. So, in this series, I won’t cover much of advanced. If you want to do advanced learning then Through eLearnOptions, look at the concepts that what is butterfly, what’s the formula, how does it work. Butterfly meaning the pay-off will look like a butterfly. -Okay. -Typically, the names will be symbolic of chart. Do you remember we had created pay-off charts using Opstra based on the strategy? Let’s take an example, Iron-Fly Strategy. So, it is a strategy which involves multiple strike price. What is happening in this? Put Option of 17,000, Call or put of 17,400, Call Option of 17,800.
So, it’s a payoff dependent on your trades in respective strike price. So, different combinations can be created, Strategies can be created with different strike price. Then I will not go in detail in this. If you want to learn in detail, there is a course by Chetan Bhai On Options – Advanced Option Strategy then you can do this course. It’s a very good program.
Chetan Teaches, and teaches very well. You can do this, and suppose if you don’t want to spend. Like now free is going on, and want to keep it free only, then not a problem in free too there is many You go into explore, over here you will see Face2Face. You know Face2Face? -Yes sir. When you enter that, go into view all. Over here you will see category of Options. Search it. Over here you will find people who have given many contents on Options. See how much content is there. 4+4 = 8+4 =12+ 4= 16+ 4= 20+4= 24+3 =27 videos, on an average of 1.5hrs Then 27 hours of learning, advanced options are here for free. -Okay. - So, I have taught you the basics.
Then if you want to learn advanced, then I might only teach you or you would say, I have to learn from you only. Or so well people have taught, take benefit of them. So, you watch these 27 videos if you have to step into advanced options. If you don’t want 27 video and you want someone to teach you, then we have Chetan bhai’s course. Join it. In today’s video, I will try to answer the question that if you want to work in options, like you selected Reliance & NIFTY If you want to work in options then how to start with it? Don’t say that I’m going to repeat the first video This is the 8th video, meaning how to strategize options considering what I had learnt in technical, Learnt RS Theory and all how to execute that learning through options with simple strategize! Not covering advanced strategy and if you want to take learning to next level, then watch it later. But the simple strategy that we have learnt, how to merge that with the old learning.
Then first of all I will have to see which stocks are there in which options is active. Because if there won’t be liquidity in options, then what will be the benefit if you work in stocks. Because it’s possible that due to illiquidity your money is used. When you go to square up, You couldn’t square up your trade. So, find out stocks which have active options. How will you find? NSE. – Great. Where in that? -DERIVATIVES. – BHAW COPY? -Yes. -So, where will we find that?
Market data > daily market report > derivatives. In daily reports, we had learned about BHAW COPY. Do you remember? -Yes sir. – Fantastic. – So, let’s go BHAW COPY. F&O BHAW COPY. Fine? Let’s select. Let’s download, we had discussed about this? - You had shown BHAW COPY to us.
Friends, if you haven’t watched BHAW COPY, then very bad. BHAW COPY is a basic document of exchange. Watch it. Watching it, you will get a feel that what is going on. This is more or less the written part of derivative of the whole day. Of which day we are talking? 3rd September. We are recording on 6th. So, why 3rd? because it was Friday. We were on a holiday on 4th & 5th. Now, I have to see that in options, which stocks have activity.
And I will use them only for tracking. So, there is a way. INSERT > PIVOT TABLE > OKAY. A pivot came, in pivot I will bring the symbols here then all these symbols came and filter in options that I am just interested in stock options. Not interest in anything else, so I bought it in filter. And, over here that I will bring will be volume, value in lacs. So, what happened in table? SYMBOL, TOTAL, HOW MUCH VOLUME, VALUE IN LACS and under options. Let’s sort it. Right click > Sort > largest to smallest. Then we understood which stocks are there in which options are active. We will work in them only. So, first how many stocks we should take? Let’s take first 30.
If we track the first 30, then only it’s a big thing. So, we copied the symbol. Do you remember trading view? -Yes sir. -We will pull this in trading view and make a new watchlist. Then let’s go to trading view. Where is your trading view? This template is familiar to you? -Yes sir. Session 31 where I gave my full that this is my model of relative model and accordingly me template is made. We will use this template only in those stocks to make option strategies. Friends, this is going to be very interesting. If you are tuned till now then do drop a like and subscribe to my channel because this thought process Of using technical study and trading in options. You would see this thought process very less in YouTube then do focus on it.
So, let’s make a watchlist now. I have a watchlist of your name whatever stocks you were tracking. Let’s add in this only, because more or less stocks are same only. Or if you say, make a new watchlist. New watchlist of stock Options that the stocks are needed to track for options. Now, in this I have to add symbol, so either I make efforts here or copy paste But before copy paste you will have to put a comma. Then how will it be applied, let me say.
*Look at screen and follow the steps to add comma* Now I want the first 30. Why first 30? Just like that. There is no such rule. Do 25 that makes you happy. One’s you can track. Let’s focus at first 30 for a time being. So, I copied it Ctrl + C and here Ctrl + V Then all came, enter. Everything came. Very nice? But see this McDowell didn’t came. Because the symbol here and at trading view is different. Then we will have to call McDowell Then, McDowell. United spirit. Selected and it came. Let’s remove this now. There can be mistake in 1 or 2.
But more or less everything is same. So, this is options watchlist. Stock options. For you this is your living area. In living area, we have to dinner, watch tv and do fun with family and during sadness, meditate and be quiet So, this is your living area. So, you have two watchlists, 1. Annapurna Watchlist is for your stock investing. In which you will work in the cash market and 2. For working in options. Now see Annapurna Ji, it’s very simple That this model, watching it make a view on a stock that whether it’s a booming stock or recession stock To make a view, you can use my model or the Bollinger and all that I said, can be experimented too. Something you have to do. Not everything can be given by me. Something has to be done to make your model. But let me say from my model, what I will do, then these 30 stocks on which I will make a view for each.
For example, Reliance. Reliance is as such an underperformer but in two hourly chart it has started out performing. So, when you are making options strategy. Then you can use chart of 2 hour. Because daily chart will take time to give trade But two hourly charts will give a fast trade. As reliance broke its previous swing high and is green in two hourly charts.
Super trend is positive too. This means we will have to make a view of boom. So, when there is a price of 2208 We will make a booming view. Then what to be done in it? Either take upper call. Will take upper call? Can take because its month starting. Theta’s impact is less. So, we will take call of 2300-2400. Take call and leave. Why? Because there is a view of Boom in the stock. Or can sell the below PUT. So, will sell PUT of how much? Super trend is positive and its level is 2122.
So, sell PUT of 2100 if you want to take risk and sell put. If you want to buy and do then take upper call. And if you want to sell and play, take risk because you want to earn from theta, then we will sell PUT of 2100. And if you want to manage risk and do it then you will do spread trade. Suppose take call of 2300 and sold call of 2400
Want to do put in below then sell put of 2100 and take put of 2000. So, you did a positive call spread above And negative put spread below which is also known as credit put spread. That when you sell upper put The premium would be high and when you take the below put the premium would be less. Then premium came home in net but put risk to 100 points. When you are selling put of 2100
And take put of 2000 then you have taken risk of 100 point because you are feeling boom So, you are okay to take risk of 100 If it falls, then 100 points can be used! But chances are there that it will rise, then you can earn from 100 points too. So, either take call option or sell put option or will do call-bull spread. Call bull spread meaning, Taking below call and selling the upper call. Or do put bull spread which is credit spread. Sell put of ‘at the money’ and take below put of ‘out of the money’. Why taking? Because you want to hedge risk and your margin requirement decreases if you take put.
Let’s take an example of one more stock. - Sir like in this two-hourly chart, in options too like there we set target Target comes, sell in that target, so if I’m a buyer so I can exercise my right anytime? -Good question. You won’t exercise your right. You will take counter trade. Suppose if you have bought it, then you will sell it.
So, automatically it will nullify. Because you will exercise the right on the day of expiry and don’t wait till last day Typically, whenever you are trading, then on Thursday. See there’s a weekly expiry and one is monthly expiry In indices, there is weekly expiry. In stocks there is monthly expiry. Then typically last day of the month Which is Thursday, no one wait’s till then. Either before Wednesday, you square up your position. So, sir when we will square up so in this how do I identify I have to square up in this target or how will the stop loss work in this. You speak? What did you learn looking at technical? – So, it’s the same as cash market. – Same.
When you make a view looking at cash market and plan entry or exit looking at this but will do transactions in options Okay. -But in options, see the three Greeks. DELTA, THETA, VEGA. GAMA I’m not saying because it comes under advance. I want to teach you till here only. So, these are playing boom, meaning playing delta. Taking in the month starting. Because my theta? -Theta would be less. -Its impact would be less or else would have worked with selling.
And theta’s impact would have been more. And volatility that is there, if I’m playing with taking long And I feel there is boom in stock, the volatility falling down is less. Because stock would be volatile! Making a breakout. Like the stock is breaking out then volatility falling down is less. Wall trading is even a complex science. In wall, I had said volatility is squamous a prediction of wall is a model in its own that’s why I discussed the wall in limited. Not did detailed discussion on it.
You will have to see advanced module of options, if you see the f2f of options then you will get more understanding of options Now I’m saying you the basic concept like you have a share then you can sell the upper call so that’s the additional return you get. It has risk that if it goes above the strike price then the whole share has been sold. If you don’t have the share And want to do boom-recession in options only? Then this kind of strategy. If you think that a stock is lying In a range and not moving then you work on its straddle or strangle. So, to make a technical view And trade in the view in market by using options, that is one of the most important strategies to be implemented. Now look at one more example, like AISHA MOTOR. It has broken the previous swing high.
This was previous swing high, broke it. RS was even positive in two-hourly, super trend is positive too. So, in this I will make a strategy of Boom. Let’s make one? -Okay. -So, let’s go into Aisha Motor First let’s go to NSE site and look at the option chain of Aisha motor. Then this is the option chain. I feel that there is boom in Aisha Motor, then what should we do? And it’s in the month starting.
Then I will have to do the work of buying because Theta’s impact is less. And if it was month mid, I would have worked while selling. By selling what? PUT because want to play BOOM. So, price of Aisha Motor now is 2850 then this is at the money and I want to play BOOM. How much BOOM I can see? So, if I look at the chart then is there any major resistance in the stock? There’s boom, but where is resistance? Over here a resistance of 3000 is coming. So, I can play boom with 2850. And I can’t see much more boom than 3000 in it because RS is not strong that much in it as it’s in two-hourly basis. Two-hourly RS is strong meaning a boom for small-time is there. When will excess boom come? When daily RS will be positive.
So, I can work with base of above 3000 then what will I do in it? Strategy. A simple strategy. In options of 30th September call option of 2850 whose current price is 93, I will take it. So, I want to add a position. And I feel that it won’t go above 3000 then I will sell call of 42. So, add position. What did I do? Took call of 2850 and sold call of 3000. So, my margin requirement is 34,923 that means 35,000 From here if it rises then there are 41% chances of me giving profit and maximum profit it’s giving chance of 34,000 So, my investment of 34,900 and if it closes in last at 3000 because when will I have maximum profit? When it becomes 3000. So, maximum profit I will get is 34,000 So, you invested 34,000 from home and profit can come of 34,000. Maximum loss happening is 18,000
Which is basically you taking and sold above. So, you invested premium. Right? When you had taken 9370 And sold at 42 then the difference in net is the premium you have invested. So this much money will be used If the price remains there only or if the price goes down which is this. Maximum this much only will be used. Our investment is 35,000 and if it actually crosses in 3000 than our 34000 money will be made in it. But then why should I do it sir because my profit is not much! 34000 can come and to be used is 18000 So, 1:2 ratio which is not bad. Investment in it is of 2 types, premium investment and margin Because you have sold the upper call too. Anything that has been sold has margin in it.
But as your below call has been taken you are getting a margin benefit so that’s why investment is less. So, ratio is 1:2 almost 2 which is not a bad ratio if you want to play boom. Suppose if you want to play boom then what is the next option? - Sir by selling put. Let’s remove this and reset it. Selling below put and now what put has to be sold of below?
Where is the super trend below? Around 2700. So, we can sell put of 2700. So, let’s sell put of 2700 So, 2700’s put I’m getting at 33. So, let’s sell it. Add position. But if selling put of 270, then loss is unlimited If the stock crashes, then your money gets used so you will want to hedge yourself too. -Right.
And see your margin requirement 182,000 which you have to give to sell the put So much of capital required. -True. -Probability of profit is high but ultimately your profit is 6% Which is also big number but obviously how will I bring so much capital. Then to hedge this, sell this and take a below put such that I get a margin benefit and a basic hedge Which put of below? Maybe this one. Take the previous low i.e., put of 2550 because I don’t feel going below it. The 2700 you did; how did you decide that 2700? – I took super-trend as the base. In this model, I am assuming super trend as base in this model, I feel that if super-trend I saying this price, Then I sell put of this price because chances of going down is less. That’s why I sold the put of 2700.
And I took put of 2250 because I will have to hedge the risk. There is one more way of buying. You see this one standard deviation? And this two-standard deviation? – Yes. -We had read in school 1-2 which is defining the probability then it’s probability of having is 66% Then the place where 1 SD is We can consider that strike price too which is 2611. So, we can consider 2600 for hedge point
So, we sold of 2700 and we can take of 2600 too. I’m telling 2250 looking at technical You can do 2600 looking at 1 SD. What’s the price? 13.65 So, let’s add it. Then this is credit put spread We sold here and took the below, in this my margin requirement increased. 78,000 Obviously because if premium is coming home, then margin requirement will increase. In that we are investing in net, then margin requirement would be less. 77,000 In this 7,000 can me my maximum profit
Obviously if we have taken and sold the below put, so the more it will boom, it will not boom very much Then 7000 can come. Maximum loss can be 45,000 which is basically these two-strike price Strike price between 2700 and 2520 is the major contributor to this loss. From here to here, the loss of 150 point And risk reward ratio for this is 1:1.5 meaning you are taking very much risk and rewards is limited Probability of profit is high but risk & reward are not in your favour so you might not want to do this. Because capital is more, return can come but somewhere or other risk-rewards is not favourable So, I will not do this work. -Sir, what will be the Greek impact? -let’s see it. So, delta is 13 which means the more it booms The more money you will make. Theta is 49 which means the more days you will keep position your money will be made
49 is basically +49 meaning every day you will make 50. Gama is 0. So, forget Gama for the time being. It’s Minus which means you have already short the premium and that’s why there is margin requirement. -Right. Gama minus meaning premium is at home, you have short the option. Gama plus meaning your investment is made
You have bought the option. Let’s keep that in mind for once. And Vega is -93 meaning if volatility inc. then you would have to give. So, this strategy is good when you have to earn theta. Buying strategy is good when you don’t fear theta. Then you can work with call option. -Okay. -So, what to do? – Sir, what if I change the range in put? If I buy at the current range of the put and sell at lower. -Say the current range! Meaning you want to sell current range
Of ‘At the money’ of 2800 because the current price is 2850 So, you want to sell of 2850 or 2800 -Little less one Sell of 2800 -Right -The closer you come the more is the risk. Can do. In this premium getting is good too. Premium of 66 Let’s sell it and what will we take? -Lower range. -Buy 2700? -Right. -See in options this is interesting That you can do so much. The more you will apply brain, the more it will be better and more you can do it. So, in this 67,000’s margin is deployed, maximum to be used is 23,000 and 11,000 to come 64% is the probability. Risk reward ratio is better too. So, you can do it. But if it falls then your 23,000 can be used Because you have done it very nearby. So, its probability is very less. Before the probability was more than 70% Now it’s 64% because the closer you come; you are Lessing your probability of profit. -Okay.
So, you have to do with call or by selling put. You will get to know while going it. Start with a lot then then an understanding will develop. So, you have to do with call or by selling put. You will get to know while going it. Start with a lot then then an understanding will develop. And if you won’t do then there is a saying that without dying one doesn’t get heaven. So, you will have to do to die. Let’s see Tata Motor, what is there in Tata Motor? It’s a weak stock so we can play weakness too.
In two-hourly chart super trend has not shown negative so we won’t do anything. But suppose if super trend is negative too And this is weak stock then we can make bearish strategy. If you want to play bearish in any stock then options Is such a beautiful instrument for that, how will you sell cash market if you don’t have share then how will you sell? But in options, you make bearish strategy too. So, you should do something that you have position in 5-6 stocks Made position in 2-3 of boom and in 2-3 you have made position of recession. So, your market risk is hedged too.
If suppose market falls, then all stocks would fall. So, the position of recession will fall too. So, in that profit will come. The one having boom position will have some loss which is fair enough. After 2-3 videos I will tell you the Concept of pay-trading. How to do that? Then in this you would understand more that how I will take strong stock And relatively sell strong stock. Or you can do through futures. Selling can be done through futures or options.
So, I will discuss in a couple of videos. So, stay tuned with the channel because in the coming day boom will happen. Will complete this series of options, and then go back to those concepts. -Okay sir. -So, what did we learn today? Let’s recap. -So, firstly I will take out the liquid stock in options from BHAW COPY -Monthly once is fine because these don’t change often. Then more or less, your universe is made. -Then I will identify what’s the trend of the stock. -How to do that?
Two-hour time frame chart. -Correct. -Accordingly make a view and from that view make an option strategy. Strategy, I can play around, I have to see which has the most favourable risk-reward, I will go ahead with that and use. -And how will you find what’s the most favourable risk reward? Obviously, you will find here but over a period of time With experience you could learn more in options. -Okay sir. -There is no perfect recipe but in options no one can say Whatever I say is correct. In options, everyone can create their own. It’s like a food. Same food cooked in a different manner.
Can give different level of high to different people. Same. The same upma, Paan, or whatever everything can be customised based on personal taste and preference. Similarly in Options. All are flavours. Spices of diff kinds, and you can cook as per your taste. So, I hope I have laid a good foundation for your options journey. Yes sir. I know you had said that will not be enough, so I have started looking and gone through ELM school as well.
Even in ELM School, the modules that are there, I’m going through that and I’m trying to watch your face2face On options as well. -Okay. You are absolutely correct that under ELM School, in the derivatives there in option strategies and Greeks. This, plus the L2T Options are good enough for your base building. For advance start watching all the Face2Face Of Options and if you need a course then Chetan Bhai’s course is very good and there are many people too working good in advance in the market. They too have many modules, learning modules, watch them But just start. Till the time you won’t start. Option in its own is a big mystery and until and unless you start You will always fell the mystery of not going anywhere. So, friends this was a small capsule on options
Recorded 8 videos, 40th Learn2Trade Not going to go much advance in that Some time else, if I want to record series, I will. From next video, we will change the tangent and move from options and discuss something else. I have 10 more video for you all. I always think that everyone should become a multi asset trader Not trade for a specific strategy. Then in the coming days, I would focus that how can you become a multi asset trader. You have learnt technical and options, now in the coming 10videos, we will talk about commodities and currency And how using that knowledge you can trade in equity either in cash market or in options.
So, more or less in this 50 videos you can develop as a multi-asset trader and after that learning is a continuous way Hope you are liking the series and there is one way to understand if you are liking it or not is when you will share with people And provide everyone this power of knowledge. Till then see you, bye-bye.
2021-09-12 19:29
