‘ I am trading in stock markets since last 25 years. do you think I require to attend training in option strategies ? ‘
“Ok, that’s great. Are you using options in your trades ? ” I asked.
“Not much. But I have huge experience.”
” Are you able to generate profits with some consistency ? “, I thought lets diagnose if he requires training or not.
“Its a mixed bag. Sometimes I make money but overall I’ll admit i have not made much. But let me reveal, I am CA by profession. Do you think your training will be beneficial to me ?”
“Sir, we are teaching you how to use option strategies for making consistent returns and for hedging purpose. Hence even if you are managing your portfolio, having stocks in cash, option strategies will help you to mitigate risk and make some consistent profits. As an CA , yes, you must be understanding balance sheets of companies really well, but still if you want to use options for trading purpose or hedging purpose , you need to learn it.”
“But what’s the guarantee that I will be able to learn ?”
” You are an experienced trader, plus you are a qualified person, so why do you think you will not learn?”
I said, “And yes, if you answer few of my questions, we can try to find out whether you require it or not ?”
“Ok. Go ahead ,” He was much more receptive now.
“Do you know what is call and what is put ? ”
“YES, to some extent. ”
“Do you know they are traded at different strike prices ? ”
“Yes, I know this.”
“Do you know what is In the money , out of the money etc .?”
” Hmm.. i think i know but sometimes do get confused.”
“Do you know how to hedge your portfolio which may have cash stocks, futures, even options?”
“Well, I have never hedged my positions.”
” Do you Know you can make profits even if you do not know the direction of market ?”
” How is this possible ? ”
” Do you know without any technical analyses software you can make consistent returns ? ”
” E… what is this ? ”
” Do you know how to make adjustments in strategies ?”
” I don’t think so “.
“Ok, Sir, I am 100% sure that you need training in options and option strategies. You will definitely be benefited from this. Now, after asking you all these questions and getting your responses , I can DIAGNOSE that you need training. Without this conversation, I couldn’t have answered.”
So , I thought let me share this interesting conversation which, can help us in deciding whether we need to get ourselves trained in option strategies or not. Let’s not jump into the pool, without proper learning. We must equip ourselves with best of tools as markets are not at all easy and there are hardly any low hanging fruits !
#Option #strategies #Nifty trading