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Option Strategies – How to do “The Long & Short Strangle” ?

Option Strategies – How to do “The Long & Short Strangle” ?

Option Strategies – How to do “The Long & Short Strangle” ?

If you have understood the straddle, then grasp the ‘Strangle’ is quite straightforward. For all practical purposes, the thought method behind the straddle and strangle is quite similar. Strangle is an improvisation over the straddle, mainly to minimize the cost of implementation.

Setup

Nifty is trading at 15921, which would make 15900 the ATM strike.  If you have been to set up the long straddle here, you would be required to buy the 15900 CE and 15900 PE.

The premiums for both these alternatives are 66 and 57 respectively. Net cash outlay = 66 + 57 … Read the rest

Option Strategies – The Long Straddle Strategy

Options Strategies – The Long Straddle

Number of times times have you been in a situation where you take a trade with great confidence, either long or short, and the market immediately reverses direction after you begin the trade? Your entire strategy, planning, effort, and capital are thrown out the window. I’m sure we’ve all been in a position like this. In fact, this is one of the reasons why most expert traders go beyond standard directional bets and develop systems that are resistant to market volatility. “Market Neutral” or “Delta Neutral” tactics are those whose profitability isn’t entirely dependent on market direction.

Long straddle is perhaps the simplest market neutral strategy to implement. Once implemented, the P&L is not … Read the rest

Option Strategies – Bear Call Ladder Strategy

Options Strategies – Bear Call Ladder Strategy ?

The word “Bear” in the “Bear Call Ladder” should not fool you into thinking it’s a bearish approach. The Bear Call Ladder is a variation on the Call ratio back spread; this plainly indicates that you use this method when you are 100% bullish on the stock or index. The cost of purchasing call options is covered by selling a ‘in the money’ call option in a Bear Call Ladder. Furthermore, the Bear Call Ladder is frequently set up for a ‘net credit,’ which means that the cash flow is always better than the call ratio back spread’s cash flow. However, keep in mind that while each of these techniques have similar … Read the rest

Option Strategies- what is Iron Condor Strategy

Option Strategies- what is Iron Condor Strategy

These are captivating times we are living in, especially if you are an alternatives trader in India Starting 1st June 2020, NSE’s new margin framework is live, which essentially brings down the margin requirement for the hedged position.

What is a hedged position?

Like riding a bike without carrying a helmet. The risk of market-moving against your position, causing capital erosion is high. However, if you hedge your position, then the danger of losing capital reduces drastically. Now, think about this – if your capital loss is minimal, then it implies that the risk for your broking is also minimum right? Now, if the risk for the broking reduces, it also means the … Read the rest

Option Strategies – What is “The Short Straddle” ?

Option Strategies – What is “The Short Straddle” ?

Those who already read our “Long Straddle” Strategy would understood that for the long straddle to be profitable, we need a set of things to work in our favor, reposting the identical for your quick reference – The volatility should be relatively low at the time of approach execution
The volatility should increase during the conserving period of the strategy
The market should make a large go – the direction of the move does not matter
The predicted large move is time bound, should manifest quickly – well within the expiry

Long straddles are to be setup round major events, and the outcome of these events to be extensively different from … Read the rest

Advice, Tips and Tricks for New Stock Investor ?

What percentage of your portfolio should be invested in stocks?

There is no hard and fast rule, but as you get older and closer to retirement, you should lower your stock exposure in order to preserve your cash. As a general rule, subtract your age from 110 to determine the percentage of your portfolio that should be invested in equities, and alter this percentage up or down depending on your risk tolerance.

Individual stocks vs. index funds?

An index fund allows you to invest in a variety of equities with just one purchase. An index fund, for example, gives you exposure to all 500 stocks in the index.

Index funds can help you diversify your portfolio while also lowering your … Read the rest

Tax Implications for Intraday Traders and How Gains from Trading are Taxed LTCG or STCG?

Basics:

The stock market is second to none when it comes to investment, since many investors and traders actively participate in trading and profit from it.

There are two sorts of investors:

1.Those that keep stock investments for more than a year and report their earnings as LTCG (long term capital gains).

2.Those who keep equity assets for more than a day but less than a year are the second category of investor and report their earnings as STCG (Short term capital gains).

Every financial market has a variety of investors, each of which uses a different method to attain their financial objectives. As a result, each investor’s return on investment (ROI) may differ.

As a result, taxation on persons … Read the rest

Primary market IPO’s ? India IPO ‘s are increasing ?

The Primary Market:

It also known as the New Issue Market, is where new securities are raised and issued to the public for the first time. It is utilised by both new and existing businesses. For the purpose of raising long-term cash, the corporation issues additional shares and debentures. Securities are issued through the prospectus.

Businessmen, clients of the company, corporate workers, present shareholders, and others can buy new shares and debentures.

BENEFITS

  1. In comparison to the secondary market, there is less price manipulation.
  2. There are no brokerage fees, transaction fees, or other charges.
  3. It is unaffected by market movements.
  4. It contributes to portfolio diversity.
  5. Investors are given a share of the company at a certain price.
  6. It helps in
… Read the rest

Learn about the impact of FII- foreign institutional investments on the stock market

Today we will discuss about the impact of FII -foreign institutional investments on the stock market.

What is FII (foreign institutional investments)?

The term “FII” is often used among stock market investors. This is due to the fact that FIIs are entities that pool significant sums of money and invest in financial assets such as real estate, investment assets, and the stock market, among other things. Because they invest the majority of their money in the stock market, money inflows and outflows have a considerable impact on stock market movement.

When the stock market falls, several headlines appear in the news. For example, FII selling causes the Sensex to drop 1000 points. When foreign institutional investors (FIIs) withdraw their funds … Read the rest

Understanding the Stock market?

what drive the market?

Simple, buying and selling drives the market. no need to complicate.

Higher demand of stock and price goes up (more buyers than sellers)

Lower demand of stock and price goes down (more sellers than buyers)

what is bull market?

it is where Bulls are in charge that is a lot of buying taking place in market.

what is bear market?

it is where Bears are in charge that is a lot of selling taking place in market.

why do people give importance to volume?

Volumes are nothing but transactions taking place in the market like buying and selling. More activity can mean that there can be a price movement or price reversal.

What is more important

… Read the rest