OPTIONS TRADING MASTERCLASS || Option Hedging - Option Selling || Booming Bulls
Finally, the video is here for which you guys waited the most That what do we trade Who does Option buying Who does Option selling When should we do Option selling? When should we do Option buying? Why is the win rate high in Option Selling? Why is the win size high in Option Buying? Why people with a lot of capital use only hedging strategies Likes strangle and straddle and bull calls, there are lot of things like this In this video You will get an answer to all the questions you had I promise I want your full attention Undivided attention On this video, so please Watch it in your free time sitting comfortably Let’s not waste our time Let’s start this video Let’s start it Finally, today the video has come Which is the third video of Option selling series Which must be making sense to all of you now That we have talked about it Earlier also I have told you that there are three types of trading Option buying, Option selling and earning money by Option strategies There is a lot of difference in all of these three You will think that this is very simple, it is same No, no There is a lot of difference So let’s directly talk about Nifty and Bank Nifty If I want to buy Nifty 15000 call If I want to buy Nifty 15000 call of this expiry Then What is its price? It is a Rs.46. 46 into 50, multiplying it with 75 Then it is showing Rs.3000 There is a call of 15,800 Just one minute Let’s open the chart of Nifty We have opened the chart of Nifty 50 Okay, 15,000 We trade In The Money that’s why we have to buy a call of 15,700 If we want to Okay? So how much does it cost? Rs.94 We click on buy so how much money Is required, Rs.7000 I have to pay For this, for Option buying Okay? Okay Alright So let’s see today’s chart So this is working on Option Buying Working on Option buying This is today’s chart The market after opening falls down Makes a low and then moves in an upward direction We will see this chart We need to see premium chart a lot of times So we will come here And open this So we get to see that I will prefer shutting all the indicators Wait for a minute Okay, We don’t want volume, We don’t want moving averages Why do we even need Pivots? Remove it So what do we get to see, let’s open 15 minutes’ time frame We saw that market gets opened here Here the market opens today On 2 July and directly started falling This opened, had a fall and fall and when market When market breaks the day’s high See, broke the day ‘s high 3 o’clock But here at 3 PM This low Couldn’t break the high Can you see? The high was of 154, became half In Option buying if the market goes upward after falling down makes a zigzag pattern even once Up down, up It’s over. Because of theta Decay, There is so much decay in the extrinsic value Thats where you get very tensed You start having loss So The process of earning from Option buying is a little different If I But the work will happen in a cheaper way It will happen Rs.7000 that’s why there is a risk
In the same way if I click on sell So randomly it is asking for Rs 1.5 lakhs See if my view is bullish here If my view is bullish at this moment Then I can buy the Call You saw that there is a loss on buying the call There is a type of loss here And if I short put there Call buy If I wrote 15000 here Trying to short PE It will require Rs.1,51,000 Okay? Now 15,700 15,700 PE Sorry guys Now I will bring 15,700 PE And open its chart And look at it When a guy shorts then what does he want What does he wants He just wants one thing that its price falls See I told you, if I make a bullish view here Let’s say, Let’s say, on this candle my bullish view, At 12:30 my bullish view is made We are breaking our low at 12:30 So if I short at 12:30 Then what can I do? I can buy the call Or I can do Put short This is simple right Call buy or Put short So if we go to short the Put Going to short the put At first Rs.1,50,000 is required 1,45,000, watch it carefully But is there any profit after giving Rs 1,50,000 This is important There we had loss If we come to short it at 12:30 Just one minute, let me come back Ok we come at 12:30 Change the time frame at 15 minute 12:30 here is 12:30 If we short this here at Rs 89 See We short it at Rs 89 Because of theta decay is thing We short Here So what we want that price will go up or down from here Obviously if it’s go down then we will have a profit As much low as it can go From Rs 89 to 60 means If you do deduction We'll have the profit of Rs 29 29 into What quantity we took here? 75 29*75 What will be the amount then? Here See even though we spent 1.5 lakhs How much money we earn? 29 into 75 Rs 2000 even though we spent 1.5 lakhs But today if we try to buy the call today at 12:30 At 12:30 if we try to buy the call where is 12:30? See it's 12:30 here See at 12:30 We try to buy call We had profit here What profit we had here? Because market gave us a great swing high Obvious thing we bought here And market gave us a great high So even in call we made some profit So how much profit we had here? Buy at 77 We bought it at 77 77-94=17 Profit of Rs 17 17*75=1200 Had Rs 1200 profit here Here 1200 profit by spending 7000 2000 profit by spending 1,50,000 Ohh Today's Option Buying is fun Today I feel the profit is good in Option Buying By investing 7000 in this a person Can earn 1200 Means Result is around 15-20 % And there by investing 1.5 lakhs, profit is 2000 Means 1%
Return is 1.5 % but what is the difference? If this If this come back down from there Then it’ll be instant loss in Option Buying And there is no loss in Option Selling Because in Option Selling’s chart And again close somewhere here It doesn’t give us loss because what happens The external value, the theta decay is always increase by the time Its value is in negative so We have to understand that What happen in Option Buying is You people have to When the day will be very trending And when your judgement is right Then you’ll earn the money What happen in Option Selling is Now I showed you the margin Now I’ll take you to the iPad The most important thing So in Option Buying that on a very trending day on a very trending day, you’ll make good money too much means good money means your return of investment will be high if your invested amount is 1 lakh so you’ll be able to make money like 20K, 30K, 40K easily you’ll make smoothly but if by mistake this goes sideways so because of theta decay you’ll have a small loss okay like 10000 15000’s small loss And if this goes in opposite direction And your risk management was poor Means you are not a believer Of Stop loss Which is a very wrong thing If its comes downwards Then your loss will be direct 30, 40, 50 thousand So this is the risk So the risk is very high in this So what happen in Option Selling is what happen in Option Selling is Then let’s talk about Option Selling This was Buying That when the view is bullish Then you do Put short Ok So market Start going downward If index chart market starts to go downwards So you’ll earn the money Ok You’ll earn the money when it moves in your direction But when it goes sideways Still because of theta decay You’ll not come in loss You’ll earn money Here you’ll make good money When the market is going with you As per your analysis When the market is going sideways Then also you’ll make money You’ll only lose the money when the market goes against you When the market goes against you So what happens here 33+33 66.6% The probability is in the favour of Option Seller 66.6% The probability is in the favour of option Seller And only 33.3% in case of Option Buyer So what is smart move is Definitely trade by being an Option Seller If you want to do trade daily If you want to become a full time trader Who have good capital Because you see good capital is also required 1.5 lakhs for 1 lot 15 lakhs for 100 lot is required
And for 1000 lot, obviously you need 1.5 crore So You know you have to have a big capital If you have a big capital If you wish to become a full time trader You like to sit in front of the market with the strategies Then you can become an Option Seller And Option Hedging Strategy I’ll tell you in this video, what is all this You can do that Ok Now, we should do Option trading The guy who has Good knowledge about direction in the market The guy whose patience level is that high that you won’t do gambling after seeing the market Won’t do trading forcefully Those people can try Option buying as well If you have a strategy Whose win rate is good You know that it will be trending in the market Then you don’t trade daily You trade once in two or three days You trade Twice in a week, or three or four times in a month Then you can earn by becoming an Option buyer But if you are thinking You’ll come to the market daily Every day you will call/ Put buy It is impossible to make money because In theta Decay market will go sideways The maximum time market will be in range Very few times market moves boom You need to understand that You have to You have to trade less if you want to do Option buying That also on a very good set up Then also if you If you think that in three months i will buy 10 trades If you buy 10 to 12 trades in three months, then also be ready to lose 3 to 4 trades Nobody has hundred percent win rate When you lose you have to make sure that you will invest your stop loss properly and use it properly and when you win You win big This is the secret for Option buyers And what about Option sellers In the case of Option seller What happens and in the case of Option buyer what happens In the case of Option seller, the win rate is high Okay? The win rate of this is high And what about Option buyer, And what about their win size Their win size is normal Normal or small and very rarely high But depends on the investment Obviously But in the case of Option buyer Their win rate is poor Because they trade again and again That’s why you should trade very rarely If you want to Make your win rate better Then you should have to stop coming to the market daily Only you have to find some good setups and trade on them So what is the win rate of Option buyers? Win size Sorry It depends obviously, obviously So much of psychology works here Psychology matters here Your experience matters Your mindset matters A lot of things matter But once if you studied it, your win size can be really big If you have watched my live trading video Then Option buying I haven’t made a video on selling till today I haven’t made it on hedging I will try to make it and show it But it doesn’t have that excitement level that I will come to make you learn Its just the same. But I’ll try to put such videos We will definitely go to see it win size is bigger there My win size is bigger there That’s why people think that it is a very unrealistic return That is not an unrealistic return But You see You, in a day, trade 20 days in a month I trade 2 to 3 days in a month This is my month’s output It’s like that So win size means that Win rate means for the buyer Win rate bad and win size better Here win size is normal and win rate is good This is the difference guys Okay, one question must be arising in your mind But Why less money in buying and more money in selling? See If we buy call for 15,000 Then it cost us Rs.94 for Rs.7000 If there is a loss, then for how much maximum amount is it? of Rs.7000 Because after falling It is going to 93, 92, 80, 70, 50. Will become zero Right? When loss is incurred But if I put short of 15,000 on Rs.59
Then when we will have profit? When it goes down As soon as it goes to 58 50 40 I will be earning money I’ll be coming into plus, I am doing Put short But when is the loss When is the loss When it goes from 50 to 60 to 70 to 100 to 150 Assume that I haven’t put a stop loss by mistake That’s why Naked selling It is very wrong We cannot do naked selling You should use some hedges Are you have to use stop loss While managing the Risk/Reward So, telling you If this becomes 200, 300 It can go up to any amount if you It can go up to any amount theoretically So there can be unlimited loss There is a limited profit So utmost we can earn Rs.60 But here it is an unlimited loss That’s why they will take more margin from you for selling But I have told you there are a 66% chance that you will make money That’s why most of the Option sellers are in profit Because they know this thing And most of the Option buyers are always in loss Because they don’t know this thing That they have to trade less They have to do less No overtrading They cannot do overtrading They cannot be exposed to the market all the time But, sellers can be exposed to the market all the time They can always stay Okay? This is a very big difference between Option Seller and Buyer Now the most important thing comes, the last one Whatever we have talked right now, we have talked about directional trading strategies This is a directional trading strategy Price action is important for this You have to know that what do we need to do How to do You have to make a bullish bearish point of view And you have made bullish bearish point of view By being Buyer and failed or has gone sideways Loss, twice loss But what about the seller Even if it goes sideways the market it will earn Earn even if it is in favour still it will earn No, he has to put stop loss Now there is a type of trading which is known as non-directional strategies Mostly when you see big traders on YouTube, you see their big profits Long-term Good, they are very good people who are already very stable in the market They are using this No one will tell you very simple all of this free on cost on YouTube I am going to tell you in very simple In very simple language All these people are non-directional traders I don’t care if the market goes up or down In the sense a little up or down works If Nifty is moving here somewhere They’ll come and make the Bank Nifty Will make a range of Rs.2000 above and below Market won’t be able to go above this We will think and that’s why we will short the call We will think that the market won’t go below this That’s why we will short the Put If the price doesn’t come above this If the price is stable here Then what is the value of call? Make 0 of 100 Earned much It won’t be able to come below this What will be the value of this? Puts value? Put will be out of the money This will become zero that is what The guy wanted They make money building a range This is known as strangle Now I will not confuse you guys I won’t be able to tell everything in non-directional strategies But I’ll tell you that there are mostly two types which operates First is strangle And other is straddle There are a lot of things but mostly which is famous Most famous for Option seller is strangle What happens in strangle is Like If Nifty If nifty here, if nifty here let’s say is on the range of 15,800 So I’ll make a range of 200 points above this If 16,000, won’t be able to cross this expiry And won’t be able to go below 15,600 And I’ll make call short here And I’ll make put short here We’ll get at least some money here We should do at least some free numbers Got Rs.70
Got Rs.60 in this And if my stock remains in this range Then obviously it will become zero If it becomes zero, I have earned Now you will say that for this we have to invest so much money Obviously if you think so Then money is invested If I come here next time and go to basket Then you see strangle, okay? Let’s click on it, click on edit This is not strangle, This is straddle Let’s remove it So see, we short the call of Rs 16,200 So how much money is invested You see once here One minute Now You see Overnight, how much money is invested to short the call? For July’s monthly expiry it cost 77k So 1.5 lakhs should be invested So if we short 15,800 PE By clicking on it then 150 should be invested 1 lakh 44 154 should be invested Right? So see One lakh is invested however the margin is 1,13,000 But right now one lakh is invested That means there is some hedging The broker is not taking 1.5 Lakhs from you and the exchange is taking less money So you can come here and check on your basket order that how much money will be required No some people think we don’t have basket holding in an Upstox or Angle Broking There is no problem if it doesn’t have it This is just for showing If you executed from a normal watch list One by one Then it will deduct Rs 1 lakh only should be 1,13,000 in the account But it will use one lakh and make 13,000 free From this 13,000 you can Option buy or Do equity trade So see this is Strangle Strangle means let’s take you back here Let’s bring you back to iPad See here what is the meaning of strangle Who does strangle Who is a non directional trader And he makes a range In Nifty of 200 points or 300 points Some people make it of 500 points In the new market or in the beginning of the month month in bank nifty people make points of thousand or 2000 People make a range of 3000 The more money there is People can play on a higher range So all the big people, all the big people who has money are doing this Okay? Even I do it but rarely But I am going to do it more often I’ll be doing everything Slowly slowly Every trader has a journey That guy grows slowly slowly Learn new things As soon as I learn new things and keep sharing it with you guys So this is called strangle A lot of time It happens that our strangle it keeps coming down So what do people do in that situation The exit the strike price And they make a new Strangle We’ll see it with utmost concentration If your price is breaching It has come here So you exit both of it and short the call for Rs. 15,900 And short the put of Rs. 15,500
This is how you adjust This is a very basic adjustment quality Obviously this is basic and will study it in deep to use all of it But according to me only if you experiment From less money You will see shorting it from one lot how you’ll adjust the experience You’ll understand many things on your own There is a good way in learning stock market trading Trading in live market with real money But it doesn’t mean that you will waste it No, trade it from less money So that is called tuition fees And I have made you understand something or the other So this is called strangle strategy Okay? Now short strangle basically Now there’s one thing called straddle What happens here is Nifty is at 15,800 We will short CE and PE of it at, at the money Okay? What happens from this Is let’s say this is of Rs 150 It won’t be this much Let’s say this is of Rs.45 This is of Rs.55 So if the market goes above and below Above and below and closes near to that Then there is so much theta decay in both of it that This will be saved of Rs 4 to 5 and this of Rs 6 So we have earned the decay’s money in straddle So there is a high-risk in straddle If the market is trending, then there is a fast loss So there is more risk So you have to maintain the stop loss You have to see how much money we have to put on stop loss, how much are we willing If we are 1:1 willing or how much willing from it We have to learn money management Or this is straddle In this you have to If this expires will get more money Because more premiums collected If we short OTM will collect less premium By shorting ATM and ITM more premiums collected So straddle is a high-risk high reward strategy Whereas strangle Is a low-risk low reward strategy Yeah, every one of them requires some level of smartness Some level of knowledge But I have told you Option What is non-directional In directional selling there is a more probability of success in buying and selling If you are a trader who trades daily You choose selling and not buying If you are a daily regular full-time trader If you are a part-time, if you want to trade sometimes But you have strategies Then you do But the most important thing have tell you is I have already made a video on best Nifty Option buying strategy In that I have told them money management rules Please watch that video I put the link here in this video After this video watch all my Option series video You’ll have fun So again I am telling you Psychologically won’t be able to accept If you bringing 20,000 and buying an Option of 15,000 And have all the stop loss Stop loss is of 30% Then you won’t be able to accept that you will face a loss of 7000 in 20,000 You have a loss of 8000 in 20,000 You won’t be able to accept That’s why we always tell you that should always have minimum one lakh rupees for Option buying Rs Five lakh for Option selling Rs 15 lakhs for Option hedging If you don’t have this, then also it happens I’m not saying that it doesn’t happen You can do it for your practice But when you want to do it seriously Minimum one lakh for buying Why? When we have one lakh for buying then we trade from only one or two lots Maximum is three When there is a pullback This have made you understood in a video Talking about selling if they would be minimum five lakh rupees then You’ll be able to short a few lots Otherwise you’ll see that you are earning hundred 200 or 500 You won’t feel good by Keeping this big capital So minimum five lakh The more it is the better it is For hedging there should be minimum Rs 15 lakhs At least Rs15,20 or 25 lakhs Then you’ll go and short Then you will earn some money I hope I had made it clear enough I’ve heard and learned so much from the market, you must be wanting to do something Today, you have understood and entire logic That what is Option trading How does it work Okay? If you liked this video As soon as this video gets 20,000 likes I will continue this thing series even more I’ll continue this even more means I may try to show you examples The once I get See, here we could make a straddle We can make a strangle Here we can do buying or here we can do selling how much you guys are appreciating Is this video being really helpful Whatever I have told you, you were searching for the same answers If you were searching for it and you got it Then I want you to share this video as much as possible Give me likes Like I want 20,000 likes on this video As soon as it happens I will do it, even if it doesn’t happen I’ll do it guys But if you’ll do it I will like it a lot Okay guys, thank you so much I hope I have given you enough of knowledge in this video Knowledge is nothing If you use it, put it in actions Thank you so much guys Bye, bye Alright guys I hope you guys have seriously got a help Even I am a trader I know that to whom do we ask such questions To whom so ever we asked this, nobody knows it or we have to do the entire course Or have to give the entire money And for this level of knowledge you have to spend in lakhs You guys are intelligent Even you are experienced I am not the only experienced one in this world You guys know that whatever content you have got from here today For this you have to get a premium version or spend a lot of money I hope for everyone, for the entire community I have done this work This video will be on this channel forever The new guy enters the market will understand this without the loss And what is his risk appetite, what is his capital What can he do What was the wrong that he was doing? He’ll understand everything Buying, Selling, hedging what does he need to do Alright? Now I have told you as soon as 20,000 likes crosses this video I’ll try to continue the series To show it in the live market What day should we buy? What day do we bear a loss after buying? What day do we get a profit after buying? What day should we selling? What day was it alright? What day was it wrong, risk management? Where do we put stop loss? Where do we leave it? When do we do strangle? When do we do straddle? If you want to see all of it Then I should know that you liked it This video should be shared This video should get comments I need to see the real views and your honest feedback When there will be all of it Then I will get to know that my viewers are liking this series And I will continue future Option series All, always Always, whenever I Know something about Futures and Option I will tell that to you Alright? So I hope you guys enjoyed This series And I want to continue the series If you want it too then let’s work together Okay? Thank you so much guys And subscribe, Many people come and watch but do not subscribe Try subscribing it This content, is a very good content You will have fun And whatever subscribers I have Carefully click on the bell notification You get a quick update after clicking Okay guys Thank you so much guys for being so nice For all the lovely comments and love Thank you so much I’ll see you soon in the next video
2021-07-09 13:37
