Skip to main content

Different Outlook To Intraday Trading With Nifty Options

Every trader need to have knowledge about trading before they start trading, and here is few points for the traders that will definitely change the outlook to intraday trading.
1.Liquidity: The volumes of the At the Money Strike call or Put are individually equal to the NIFTY Futures Volumes. The combined volumes in the At the Money Call and Put are more than the NIFTY Futures.

2.Options are the only Instruments which move more than the NIFTY in terms of percentage moves.

3.Time DecayOptions are prone to Time decay which is commonly known as the Theta effect.

4.Effects of other Greeks: Implied Volatility tends to increase in range Breakouts and subsides when NIFTY gets in a rangebound move. Predicting the rise or decline in Implied Volatility is a challenging task for traders and needless to say successful predictions carry huge rewards.

5.Specialized skills:
Trading Options thus is a very specialized field where lay traders without any knowledge of the interactions of the key greeks can get caught on the wrong side inspite of the right view on the NIFTY. Example many traders come to me with the question I bought the call and NIFTY moved up some 100 points but the Call option which I bought hardly moved up by 30-40 points.

Here the Trader had a right view on the NIFTY but failed to factor in the effect of the Implied Volatility, Theta etc and ended up making less money inspite of a correct view. Alternatively the Trader would have made better returns by selling some Near the Money PUTS. The strategies keep changing with the views and the above is just a theoretical example.
Visit Us : www.technotrades.biz
Contact Us : 09958406102

Comments

Popular posts from this blog

FOREX TRADING MT4 INDICATORS CAN BE FUN FOR ANYONE

The Facts About Forex Mt4 Indicators Revealed Scalping has come to be one of one of the most prominent forex strategies. The idea behind scalping is to open and close trading settings quickly, making a little profit at the same time. By "swiftly" we suggest a duration of time that is generally numerous minutes in duration, in some cases even a number of secs; by "a tiny revenue", a profit of 1-5 pips. Examine This Report about Forex Exit Indicators Mt4 Since scalping traders do not maintain employment opportunities for long, they are not as exposed to market volatility or swings as various other forex investors. Our forex scalpers are based upon an one-of-a-kind trading technique. Our foreign exchange scalpers were forward-tested in genuine or demo accounts. Our major foreign exchange scalpers come furnished with a GMT auto-determination component, which permits these scalpers to be made use of by any broker without further adjustments/modif...

SUPPORT AND RESISTENCE IN STOCK MARKET

In stock market , support and Resistance symbolizes key junctures where the forces of supply and demand meet.   Prices are driven by excessive supply (down) and demand (up).   Thus technical analysis is very much important in the wake of knowing buy/sell signal .   Supply is synonymous with bearish, bears and selling.   Demand is synonymous with bullish, bulls and buying.   These terms are used interchangeably throughout this and other articles.   As demand increase, prices advance and as supply increases, prices decline.   When supply and demand are equal, prices move sideways as bulls and bears slug it out for control. SUPPORT ? Support is the price level at which demand is thought to be strong enough to prevent the price from decline further.   The logic dictates that as the price declines towards support and gets cheaper, buyers become more inclined be it intraday or delivery.   The intraday trading software can make out a p...

Get Live Charts Nifty Signal Using Buy Sell Signal Software

BEAR MARKET PREVAILS,NIFTY GIVES WAY Policy paralysis seems to be eating away the growth cycle recently picked up due to the sincere   efforts on the part of the govt coupled with well timed action by RBI which deemed fit to slash repo and CRR.   The depth in the market is deepening with every trading session .   Premiums in both NIFTY FUTURE and NIFTY OPTION are fast disappearing with discounts sneaking into it vigorously.   The NIFTY sunk below 5600 for the first time since November 23, 2012.   That was the first time that the Nifty actually flirted with the 200 day moving average (DMA).   Now it’s a big question that “is the NIFTY and midcap index which has outsmarted NIFTY in falling fast, replicating the trading pattern similar to 2008.   THE 200 DMA—KEY SUPPORT If one peeps into the recent past, one can get to know that the Nifty has not gone below 200 DMA on a closing basis.   In 2008, also the similar trend where midcaps ...