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

NIFTY TREND ANALYSIS & LEVELS FOR TODAY

Updated for-Jul/12/2013 Nifty was on a bull trend and closed at 5935 level. So today the first resistance for nifty is at 5971-75 level. Next resistance ranges are at 6008-12,6030-35,6047-52,6069-73,6088-92 levels. On downside first support is at 5898-94 level. Next supports are at 5861-56,5834-30,5800-95,5780-75,5741-36,5722-18,5702-98,5670-65,5623-18,5590-85,5569-65,5536-32,5518-14,5497-92,5477-74,5445-41 level.Nifty is in bull region So today on upside intra resistance are at 5975 and 6012 level and on down side support are at 5894 and 5856.Below 5856 be very alert and avoid longs.  Positional Support for NIFTY 5905 5872 5868 5838 5830 5824 5772 5764 and positional Immediate resistance for NIFTY is 5961. Intraday Resistance of NIFTY are 6008.8 : 6069.9 : 6051.2 : 6067.4 Intraday Support of NIFTY are 5861.4 : 5800.3 : 5820.1 : 5804.2

Trading Is a Game of Anticipation, Not Reaction

Every trader is there in the markets trying hard to earn maximum money . But most traders are only making impulsive moves in entering and exiting the markets out of anxiety or impatience. They try to jump the cart , and take either early entry or late entry.Most traders think that the more number of time they take trades the more they are going to earn . It is not like this . The markets are to be understood properly, like its dynamics. The trader feels how he can use his time spent sitting in the markets to the best use, so he tends to be overactive or over trades. once you get to understand the market dynamics then only take suitable trades and that too when the setup is fully confirmed. This would at least lead to best probability in your trades. In fact there is always more sense in studying the weekly and the daily charts which most of the intraday traders miss to do and they are only starting the day and looking for the buy sell signals haphazardly, and looking for entries. ...