There are so many strategies and any serious investor or trader can easily get confused by different strategies available. He needs an answer that which strategy he/she should be using. Even we have three different websites
Let us try to dissect and diagnose these strategies and try to match different strategies with your profile.
There are two kinds of strategies :-
a. Short term income generating monthly strategies.
b. Long term wealth creation strategies.
And, you can do both these strategies with SAME CAPITAL.
Yes, you do not need separate CAPITAL for these two different set of strategies. You can earn monthly returns as well as long term returns on SAME INVESTMENT.
So we need to see which strategies can be used for monthly income generation and which strategies can be used for long term gains, based on your profile.
There are two types of traders and we consider that everybody is an investor in the long term.
1. Full time traders
First category is of full time traders who are almost always there, in front of screen and hence are actively monitoring their trades. They are continuously watching the movements in the market and can adjust their position, pretty quickly. There are many sub categories in these type of traders also, such as a retired person who is always there in front of screen but he/she cannot invest into high risk strategies which a young person having decent capital or a broker / sub-broker trading for himself can surly invest.
Also, even full time traders can be further differentiated based on the knowledge and skills they have acquired for making returns from the market. For example – some of them are quite well trained to trade in options whereas some of them are still trading in more conventional methods of cash trading only.
For long term capital appreciation of your investment, irrespective of your profile, you should go for covered call and naked put strategy. Link is as given below:-
Based on your profile, following strategies for trading purpose (monthly returns) are advised.
a. Full time traders with good knowledge and experience in option strategies –
Short Strangle, Long strangle – in Nifty
Master Strategy – in Stocks
Banknifty trading plan – in Banknifty
Bear call spread/Bull put Spread – Stocks/Nifty
b. Full time traders with little or no know-how in Option Strategies – Must attend one of the workshops (online or offline) before doing any short term trades. They can go for long term wealth generation strategies of covered call and naked put. Link is as given above.
2. Traders occupied with Job / Business
These category of traders do not have luxury of monitoring their trades all the time. They may be invested in a strategy but there is a chance that when time comes for adjusting the trade, they are caught in a meeting !
So they should be trading only in strategies which are safe and do not require close monitoring. They should trade in a strategy which requires little adjustment and the adjustments can be decided well in advance, before entering the trade. So, they can always set triggers / alerts and whenever the trade reaches a point of adjustment, they should get the alert and accordingly adjust. So for these kind of traders in addition to wealth creation strategy of covered call and naked put, one strategy that works really well is MASTER STRATEGY.
This is a strategy
– which works only in STOCK FUTURES & OPTIONS.
– You need minimum 2.2- 2.5 Lakhs margin money to set up the trade.
– Its a hedged, positional trade and cannot be applied in Index(unfortunately).
– Doesn’t require many adjustments.
– Master strategy keeps the invested amount safe even in any kind of a vertical crash. One do not lose invested amount, even if the chosen stock becomes zero !
So , you can choose a strategy according to your profile and temperament. Feel free to get in touch for any further details.
The Option School