Options trading tutorial india

Option trading has tutorial advantages over other investment vehicles. They can be a complex topic to understand at first - calls, puts, delta, hedging etc. But trust me, many a newbie have started this trading just like you.

Starting tutorial, a few concepts at a time and before you know it you'll be placing your first option trade. You might think options are a finance novelty. If so, you might want to take a good look at this volume graph taken the US Options Clearing Corporation options. US Volume Statistics from the OCC. The explosion and continued growth of the option market proves its' every increasing popularity amongst the retail trading segment.

Retail traders are loving the leverage, available asset selection and variety of trades possible with options and tutorial of options. Traders can now choose options, not only on stocks, but on indicies, commodities, foreign exchange and exchange traded funds ETFs.

A big factor in moving traders from traditional stock trading over to options is the leverage options can provide over the underlying instrument; and depending how you structure a trade, your entire risk per trade can be capped at a per-determined amount. Meaning, you can know in advance what your worst case loss is if the trade goes completely against you - something traditional stock trading lacks. Everything you need to get started with your first trade you will find on this site.

You're welcome to ask questions either via the comments box at the bottom of most pages or via FaceBook and Twitter. Please shout out if you have any questions or suggestions for the site! Hi Dave, Sorry for the late reply here I missed the notification of the comment. If you want to play it safe, you should buy the next strike down e. Then you will no longer have a position to be assigned on. You cannot, however, have one strike cancel out the other as they are different strike prices.

Let me know if it's not clear. I have sold a naked put option for 10 contracts. I want to protect against it dropping through the Strike price and having a margin call or being assigned. I understand that I can protect against that by buying a put on the stock. Otherwise what do I consider in picking the right put to buy? How do I close out these transactions? How do I get my obligation to buy the stock cancelled?

In other words, how do I get the one stock option to cancel out the other? Hi Nathan, Deep in the money call options will have a delta of 1, meaning that the price of the option will move 1 to 1 india the price of the stock. I purchased an in the money call option that is now deep in the money.

I want to lock in my gains. The options expire in Sept. I am not getting much time premium. The option is for 70 and the stock is trading at I am only being offered The premium seems low but that is not my question. I own 10 contracts. What do you think about locking in gains by selling a July 85 for 1.

What is another play that I can do with these in the money options? Dear Sir, I am trading in Indian market my doubt is follows I have a query on Option delta. I was checking delta for OTM Put and call option strikes. Then I have observed that on puts, strikes are nearer compared to Call strikes with same delta. When Nifty market atCE delta is.

But the difference from to is and from to is Why this much difference is in price trading. Thanking you in advance. Hi Peter Sir, I am new in option Intra day trading. If you have another strategy then please tell options. Thank you, Anu India. Hi Steve, Regarding replication - do you mean synthetic relationships? So a short call position can be replicated using a short stock and short put.

Trading a short put can be replicated with a covered call. Hi Karen, I'm really not sure how this relates to the Black Scholes option model, sorry! Can you share a little more about your calculations i. Just so I can try and understand more about the question. Btw - what is this course you are doing? Sounds tough for a beginner class. Hi Peter, You are super.

Btw, i also got confuse on the option replication. Am i right to say to replicate a short call, you lend out money and short call shares trading stock? For replicating options short put, you actually borrow money and buy put shares of stock? However, for replicating a long call, you lend out money and buy call shares of stock while for replicating a long put, you borrow money and short put shares of stock. Is my concept and understanding correct? Hi everyone, I'm taking an option trading beginner class and got this question related to deposit insurance in today's lecture.

Bank A has no other forms of debt. The deposit insurance coverage is for 1 year and the fixed premium rate is at 50 basis points per dollar insured deposit. The question is how much tutorial the total dollar value of this subsidy by using the BS formula. And why the level of the interest rate does not have any effect on the answer? I have attempted to solve it and the calculation on put option price is And if i change tutorial interest rate, then the put option price also change subsequently.

Hi Steve, The most likely candidate is a drop in implied volatility - a decrease in interest rates will also cause a drop in the price of an option although the effect is minimal compared to IV. Hi Joe, I would say that the answer is A - assuming that the option in question for the stock and the future is the same i. As there are no dividends paying on the stock the one year forward price for the stock will equal the one year future price. Hi trading, I just wonder what would cost the price of a india decreases significantly while the price of tis put option also decrease.

Is this due to sudden decrease in the hedge ratio? Anyone know how to deal with this question? Use the Black and Scholes option pricing model to make judgement on the following statements. Assume that there are no trnsaction costs or other cost. Y is exactly equal to 1.

Correct - you're bullish on the stock when short a put. Owning the stock doesn't negate your obligation to deliver when assigned on an option contract. In the same way as not owning the stock when short a call won't stop your obligation to provide stock to the buyer if you are exercised.

In the even of a short call assignment your broker will borrow stock on your behalf, which will be sold to the option buyer upon exercise. You will then have a short position in the stock until you buy stock to cover and pay borrow costs aka stock borrow. Peter, You are correct sir. I was thinking about buying a put. If I'm the seller of a put, I'd want the underlying security to at least remains at the strike price if not go higher at expiration, correct?

One area that I don't understand is why do I have to purchase a stock if I get assigned when I already own it? Hi OptionRookie, I think you've mistaken calls and puts here Unless I misunderstood your post?

Hello Peter I have another senario for you if you don't mind. I have Nok shares. I almost forget, Nok doesn't pay dividends anymore. Let's say at expiration I get assign. I'm leaving commission out for ease of discussion. What's the catch here? Are my calculations correct or I'm whipping up a fantasy strategy? Why are many investors go this route if it's so profitable?

Thanks again and have a nice weekend. I really appreciate the explanation and the spreadsheet is great. Just what I needed. If you are short naked the call and it expires worthless stock below the strike then there is no action to take - the premium received when you sold it is your profit.

If you don't own the stock then your broker may tutorial stock on your behalf to sell to the buyer. You will then have a "short" position in the stock until you buy back the stock to cover while paying interest on the borrowed stock. Also, if the options are American style then you may be "called" before the option's expiration date to sell the stock at the strike price. Peter, I'm currently selling 10 Nok 3.

Do I have to do anything to close it out or just leave it there until it expires? As always, thanks for your expertise. Nope - you options buy to open the same contract in the same month straight away. The same as trading you were trading a stock; you can buy to open, sell to close and repeat as much as you want - or until you run out of funds.

So if I sell to close a contract and made a profit, do I have to wait one calendar month if I want to purchase the same contract again? Hello Peter, Quick question for you.

Does the wash sale apply to options? Hi Bill, I'm not familiar with TradersHelpDesk - what does their strategy involve? I understand you can't give too much away but a basic overview would help. I am currently using TradersHelpDesk trading method to trade options. I am happy with it Hi Sally, "Buy to open" is when you establish a new position in a security. In your case, you would have initially been flat no position and after "bought to open" would be long a put option. Hi, I'm new to option trading.

Someone please explain What is Bought to Open Put? So, you would want to go long Total and short Shell? Using options to do this instead of the stocks outright would be to use synthetics.

Not sure if there are any other strategies suited for this? Thanks you are great. Most likely - it depends on the broker. Interactive Brokers, for example, allows you define your account in another currency. You can also perform foreign currency options within your account for other countries that they support.

For your other questions, you will need to read up on the relevant tax treaties between India and the US; India and US Tax Treaty. Hi, Iam a Resident of the India -Bangalore. I have few queries before investing in US Stock Market Equities.

Can I invest Indian money for US Options Trading or in US Stocks? Once the Indian money is funded to the Brokerage account,will it be appeared as US dollars? IF I pay Tax on US Stocks and Options thru online Brokerage Account ,who located at US, Do again I have to Pay Tax in India? When is the Declaration of Income Tax is done at India for April Marxh year??? How do Tax regulations apply at India for US stocks and Options? Would be greatful if u get me this information.

Hi Peter, Your tutorials and the excel files you have given trading immensely useful. And you do all trading for free. Thanks for the fantastic site. I never click banner ads but I do on this page with the hopes that it helps maintain this great resource. Hi Wayne, If you sell the option back before the expiration date then it is a manual transaction - i.

If the option expires and it is in-the-money then the sale of the option is automatic. Hi Peter, Thx for the last answer, When you sell back a call early, is it an automatic sale, like mutaul funds or when a buyer buys it?

Hi Wayne, Your net profit in both cases should be the same. The difference is that in the second example, you will need more capital to take delivery of the stock once it has been exercised. At the expiration date, the option options be worth the intrinsic value, which will be the stock price minus the strike price.

So if you exercise the option, you essentially sell the option at zero to close it and then take delivery of the stock at the strike price.

Then you sell the stock back in the market to make the profit. What would my net be approximately? I'm trying to validate my thought process. Hi Raghavendra, the historical volatility spreadsheet downloads the data from Yahoo only. In the historical-Volatility calculator, how can I import Nifty Futures.

The Excel gives spot prices. But I want it for Nifty futures, which I want to import from NSE site, from the link link Please let me, how to do it. Hi, Ive been learning trading trade options and futures for over a year and im ready to begin. However ive found that with my current broker im not allowed to trade futures at all and they only want to allowed covered options strategys.

Hi Patrick, no worries about the questions, I'm happy to help! It's impossible to say exactly what the market price of the option at that time, however, you can be certain that the price of the option will be at least its' intrinsic value - i. Check out the page on option value for a deeper explanation. Hi Peter, Thanks for all the great info - you're very patient and clear.

I'm pretty sure I'm clear on the call options - which I'm hoping to purchase soon The reason I ask is this: I plan to buy a fairly ridiculous number of call option contracts - pretty cheap. I wouldn't have the cash on hand to exercise the contract so, I'm clear on the fact that I can just unload sell back the contracts if, in fact, they are in the money, correct?

I guess my question is, how do I know what sort of profit I'm getting? I can sell the contracts back, yes? Thanks in advance - hope my questions isn't too moronic. Hi Kanchan, a pricing model depends on the style of option e. NIFTY are European style and stock options are generally American style. For European options you can use a Black Scholes Model and for American options you can use a Binomial Model. Hi I'm Daniel from Malaysia I'm very new in option trading. Can some one please guide me where I can learn when time to tutorial the trading?

Great information on options, what kind of strategies can be used in this volatile climate especially trading instruments like Gold. Yes, take a look at the article on the Binomial Model. Any potential gains due to movements in the underlying price need to be enough to outweigh the effects of time value and changes in implied volatility.

Having said that, however, if the price movement you mentioned occurred very quickly, say, over one day then you will most likely still make money on that trading.

Hi Peter, I'm options getting to know options and had few question if you can help me understand. Say I have bought a call option contract with strike at a premium of 15 and qty on 03rd Sept, whereas the current index level is Now if the index moves till do I still make money?

Considering that the index has not cross the strike level of buy level? I think a simple "buy" and "sell" is enough. I mean, if you own shares in MSFT and you want to get rid of them I think it is clear tutorial that you would "sell" MSFT. So when I sell the contract it doesn't mean i'm writing it i'm just selling a already written contract correct?

Whats the difference between Buy to open and Buy to close and all the rest Kind of - but you don't "have" to buy the stock.

You have the "option" to buy it. If the option contract is worth more in the market than what you paid for it, then you can simply sell it back and make the same profit then you would if you went and "exercised" the option and purchased and sold the stock. Hi, I'm very new to options have been trading stocks for some time, and i'm self taught about everything, i'm only 16 and i'm having some trouble understanding them I don't have to buy any stocks?

I downloaded your Option trading worksheet. It is very useful. Thanks for your effort. Hi Peter I am interested to learn options trading but I am a total newbie in this area, and I really am lousy on charts and calculations. So far I have touched on your introductory notes on 'What, Why and Who Trade Options", you have made it very easy to understand, thank you. Hi Jason, I've never come across this firm before. They are Australian based so the information would be focused on ASX listed stocks I would imagine.

I've never participated in any options course like this so I cannot comment directly - options would like to hear about your experience if you attend. Hi Peter, have been looking at doing an options trading course that covers in details charting techniques. Have spoken to several training providers however one of them can be found at http: Have spoken to past students who have had some good success with india covered calls.

Their strategy involves Elliott Wave, Swing Trading and Fibonacci any thoughts would be greatly appreciated thanks Jason. Hi Harry, your best bet would be to try option market making firms, however, you'd be hard to find them in India. Both NSE and BSE are order driven markets where there is no official recognition of a market maker.

There are firms making markets on options in India, however, their details may be hard to find. I checked the NSE website just now and couldn't find any options firms. You might want to contact the NSE directly and ask them. Alternatively, you could reach out to your local broker. I am from India, I did my MBA in finance. In final semister I took Option Strategies as my Project. Now I want to work in this field so what to do now and which companies I should try,can any one help me in this matter?

I've not bought the ebook ezy options sells so I cannot comment. A good video options course is the Option Income System - an online video series. You mean like a Long Condor or Short Condor?

Hi Jan, Here are some option recommendation services; Option Sizzle Index Option Trader Call Writer. Hi Sandy, Your broker should provide a platform with options functionality. However, if you prefer standalone software for analysis you could try optionvue.

Your site is very informative. I am new tutorial this. Hi Gerry, If you own the stock and sell a call and a put at the same india i. You may want to go through whatever theoretical courses that you have taken a few more times. Over time, you will lose india shirt. For example, MSFT was selling for around Let's say you sold 29 Feb options.

On 28 Jan MSFT hit Two days later when the price ratched down to HiI have some questions relating to optionswhich I dont seem to find answers tomaybe you could help. If I own stocksay MSFTand sell a call option for strike price 29pocket the premium I understand this obliges me to sell the share at Then if I sell put india for strike price 29pocket the premium I understand this will oblige me to buy share at Is this a viable strategy?

I cannot see a down side but I have only theoratical experience with options. Thanks for you quick response, I gone on to the Savi website but they do not appear to provide tutelage in options. My main interest is in options. Hi Damien, if you're after practical training with a prop trading firm, then you could try getting in touch with Savi Trading - they are based in London [link removed as no longer valid].

If it's just some conversational type mentoring then you might want to try asking a few of the folks tutorial Trading Coach Directory.

I'm not affiliated with either of the above so cannot comment on the quality of their material. Though if you try any of them let me know and I can pass on the feedback via the site. Please admin, I know nothing about share trading, futures and options, but I hold a masters degree in real estate finance and I am most willing to learnin particular options trading so I can make myself a better life, Please can you kindly recommend a good tutelage program or course for me so I can educate myself and make this life I dream about a reality.

I am willing to devote total time, energy and al m y resources to tjhis as I have been advised by my sister in Canada to learn about options trading to make my income from there. I reside in the UK London to be precise and am really keen to know where to begin and for this knowledge.

I know india background knowledge about options, futures and shares but that is all there is to it. Please kindly recommend me good tutelage or good program to educate me to the standard I want, Please. Please bear in mind I am a novice but a quick learner, I will like some practical and theoretical program to enable get myself this new career. Can you please elaborate - is something not clear? I am open to suggestions on how to improve the content.

I don't understand the strategy so, i am not interested but, now I want to understand because of to earn money. Your option strategies are not creating the doubling or tripling account values as some of options other news letter buddies claim in their sites. Hi Kam, yes, trading can do whatever you want to the spreadsheet.

The VBA code is not protected, so just open up the VB Editor and change the code all you like. Implementing a Volatility Skew is a bit trickier though You can use the Implied Volatility functions in the workbook for that. Then, you would have to implement your own fitting logic to define a curve around these points.

Once you have that, you can use each discrete point as your volatility input for your option model. Hi, I just downloaded the excel spreadsheet. I have 2 questions: Is it possible to modify the model from Black Scholes to Whaley American Futures options? How can I give a skew to the volatility for OTM options and be able to manually shift it and modify the slope? Hi Tony, most options say to start off trading stocks and "work" your way up just so you become familiar with the risks associated with trading.

It's up to you though. When I opened up my first brokerage account my first trades were tutorial orange juice and lean hog futures. Then I traded stock options on US equities before I actually did any electronic trades in stocks. Hi, I want to get into stock trading, can I start by going into option trading right away?

Good day -we trade in indian stock mkt,if your strategies suits Indian mkt then we too want to learn more on option trading,please Guide me,Ty. I'd like to say thanks for the contents here in general and the spreadsheet in particular -- it is the most wonderful learning tool one can find.

Especially the Tips tab. When I check Natenberg's book Option VolatilityPagetutorial has the strategy table, I was so confused -- I couldn't believe the book got the market direction reversed. Thanks for getting it right. I love the spreadsheet. Im still needing a U. If you do try it out, let me know your findings. Hi Marie, Hard to say.

Possible sure, but difficult to say without knowing more about their strategy. Could you elaborate a little more on how they expect to achieve this? Or provide the web address of the said company? One company offers to double your money in three months investment in otions trading, they say that their risk is very mininal. Is this possible, or could they be legitimate? Learning to Trade Options Option trading has many advantages over other investment vehicles.

Every Body's Doing it! Options What are Options? Where are Options Traded? Option Types Option Style Option Value Volatility Time Decay In-The-Money? Options Diagrams Put Call Parity Weekly Options Delta Hedging Options Asset Types Index Option Volatility Option Currency Options Stock Options.

Comments Peter September 1st, at 7: Dave August 27th, at 7: Dave Peter June 30th, at 7: Nathan June 30th, at 1: Nathan Faisal India 27th, at 2: Regards, Faisal Anu April 7th, at Peter April 3rd, at 5: Sounds tough for a beginner class ;- Steve April 2nd, at Karen April 2nd, at Peter April 1st, at 8: Steve March 29th, at Joe March 29th, at 9: OptionRookie March 26th, at Peter March 25th, india 9: OptionRookie March 22nd, at 2: Nick March 21st, at 9: Peter March 14th, at 9: OptionRookie March 13th, at 2: Peter March 8th, at india The same as if you were trading a stock; you can buy to open, sell to close and repeat as much as you want - or until you run out of funds ;- OptionsRookie March 8th, at Peter March 8th, at trading OptionRookie March 7th, at 1: Peter November 4th, at 4: Bill November 4th, at 9: Peter October 29th, at 4: Sally October 26th, at 5: Peter August 14th, at India July 30th, at 5: For your other questions, you will need to read up on the relevant tax treaties between India and the US; India and Options Tax Treaty Satish July 29th, at 8: Venkatesh July 7th, at 4: JB April 15th, at 3: Peter March 29th, at Wayne March 29th, at 7: Peter March 28th, at 6: Peter February 26th, at 4: Raghavendra February 25th, at 6: Peter January 23rd, at 3: Patrick January 1st, at 8: Patrick Peter December 27th, at 6: Peter December 20th, at 5: Adil Siddiqui October 27th, at 3: Bruce October 3rd, at Tutorial September 11th, at 7: Peter August 11th, at 6: Gabe August 11th, at 3: Thanks, Peter July 31st, at 7: Gabe July 30th, at 5: Thanks, Vignesh July 29th, at 6: Peter June 16th, at 5: Really u r doing a G8 Job Peter May 10th, at 7: Jason May 10th, at 1: Their strategy involves Elliott Wave, Swing Trading and Fibonacci any thoughts would be greatly appreciated thanks Jason Peter April 7th, at 8: Harry April 6th, at 1: Peter March 2nd, at 3: Dave March 2nd, at 2: What are some good cheap options trading courses?

Peter February 15th, at Peter February 14th, at 4: Sandy February 3rd, at 3: Peter January 31st, at JPD January 31st, at Gerry December 17th, at Thanks all damien December 17th, at 9: Thank you Peter December 16th, at 4: Many thanks Peter November 29th, at 6: ARVIND TRIPATHI November 29th, at 5: Ankit October 20th, at 7: Peter October 4th, at 7: I would be interested if you have AR October 4th, at 6: AR Peter September 6th, at Kam September 6th, at 7: Tony August 19th, at Peter March 18th, at 6: Shawna May 17th, at Jeremy April 10th, india Admin March 22nd, at 6: I will add a Binomial option pricing model soon.

Greg March 20th, at Admin February 23rd, at 3: Admin September 30th, at 8: Marie September 29th, at Add a Comment Name.