Entries by admin

No need to be Jack of all trades , choose your trading style !

Stock Markets offer various ways of trading or investing. Broadly, direct investments can be done in following different ways :-1. Fundamental analyses – This may also be known as value picking. One of the oldest method of investing in stock markets. Here, you analyse stocks based on various fundamental attributes such as – cash flows, dividends , […]

5 Gems from Warren Buffet .

Warren Buffet is considered as one of the most successful person in stock markets. We do find him sharing marvelous advice at different junctures. In fact there is a whole book compiled on Gems by Warren Buffet. Would love to share 5 Gems from Warren Buffet with you. Also , we are sharing our learnings […]

Are you an intelligent investor ?

Who is an intelligent investor in stock markets ? As Benjamin Graham explained in his book, this kind of intelligence has nothing to do with your IQ or score in any competitive exam. It simply means being patient, disciplined and eager to learn. Also, you must be able to control your emotions and think clearly. […]

Covered call with extra leg.

It is an accepted fact that covered call is a great way of creating wealth through stock markets and without much involvement, i.e quite passively. If we want to capture a good amount of capital appreciation of stock markets, covered call can help to capture that with minimum risk. But again, different markets have different […]

No reason to be alone !

As per the words of a very experienced trader, ‘ One of the biggest mistakes I made in my early trading career was trying to go all alone. I thought I am smart enough and will figure out everything of my own. It was a big mistake. I not only spent probably 3 to 4 […]

Why Greeks are so important in Options Trading?

Markets will always move upside, downside or sideways. Now presence or absence of these movements will be responsible for profits or losses in the portfolio. As an investor or trader, we all understand this. When we trade in multiple hedged options, it becomes all the more important to know the effect of three different things […]

Non-directional Trading Strategy?

Let us show you an example of NON-Directional trading strategy using Nifty Options. A Non- Directional trading strategy in derivative markets primarily means that we are neither bullish nor bearish about markets. This doesn’t mean that stock markets are non-directional. Markets will always move, but the option strategy is created in such a way that […]

What are Option Spreads?

What are Option Spreads?   If we want to use full power and flexibility of options trading, we must spend time in learning what are Option Spreads. If you are buying a call or a put option, what you are doing is, you are trading in a single contract or we can say single ‘leg’. […]

5 reasons why you LOSE money in stock markets – part 2

REASON NO 2 – SHORT TERM VISION     There was this client who enrolled for our guidance for derivatives market. After the closing of first day of trade, this person had a loss of Rs 75 /- in his overall account of approx. 5 lakhs. He called us and was sounding really nervous. Next […]

Markets will always surprise traders !

Markets have strange ways of giving surprises. Yesterday, when RBI policy was to be announced, any expert trader will expect Implied Volatility of options to drop after the event. But what happened ? Implied Volatility went up ! Why so ? There was nothing bad in the RBI policy. In fact it was much better […]

Do I need training ?

‘ 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 […]

Understanding Implied Volatility

When we are trading in options, specially with option strategies , correct understanding of implied volatility is must. A non-directional option trader is trying to earn profits through decay in option premiums and it is extremely important that trade is initiated when premiums are high. When will the option premiums be high ? Option premiums of all the options will increase whenever there is more uncertainty in the […]

START WITH PAPER TRADING

If you are just starting your journey in options trading, it is always prudent to start it with paper trading only. Although option trading through option strategies can be a really rewarding business, but if you do not understand it well, it can be really dangerous on your capital. So, best way to start is trade options on paper only. Make some […]

Nifty Options

Nifty options or stock options ? A continuous dilemma for most of  option traders. Whereas there is great liquidity in Nifty Options not only for current month but also for next month, low implied volatilities reduce the premiums. On the other hand we get decent premiums in stock options but liquidity is always an issue […]

Returns For The Most Unintelligent Investor

Who is the most unintelligent investor for stock markets ? One who buys , whenever the market is at its peak. So, will he be able to make any returns ? We analysed data and decided to know that what will be the returns generated by most unintelligent but consistent investor in the market. Prior […]

Long term profits vs short term gains

Every now and then we get this input that if you stay in stock markets for sufficiently long period, you will surly get good returns. But what is a sufficiently long period ? 2 years , 5 years , 15 years. Anybody is bound to loose patience if the investments are not resulting into any […]

Hedge Your Trades

Markets are showing extreme volatility. Specially in stocks, we find a particular stock suddenly going down by 10% in the opening trade or some other stock going up by 6% in the opening trade. In this kind of stock market scenario, how shall one invest. Although in long term , Indian markets seem to be […]

Option Strategies

When there are so many option trading strategies already , why do we need a new strategy ? One of our clients was very right in asking this question. But there are two issues which are not fully resolved. First, all standard option trading strategies such as long strangle, short strangle, straddle, butterfly , iron […]

Option Trading

Got a very interesting call , wherein the caller asked us , ” What do you mean by strategy ?” “Strategy means we will be creating a combination of positions which  should give us profit as the things move in the series”  was the reply. ” I am trading in options since so many years, […]

4 MYTHS ABOUT OPTION TRADING

Options trading means trading in calls and puts. Call option and put option trading is easier than most people think. If you have never traded options, or you have traded options but are not clear about strategies and fundamentals , you are surly missing something very useful. Not only is it easy to learn, but trading puts and […]

What is PUT Option ?

Put Option Definition: A put option is a type of security that you buy when you think a price of a stock or index is going to go down. More specifically, a put option is the right to sell one lot of shares of a stock or an index at a certain price by a certain date. That “certain price” is […]

What is CALL Option ?

Call Options Definition: Call options are a type of security that give the owner the right to buy a lot (pre-decided quantity) of shares of a stock or an index at a certain price by a certain date. That “certain price” is called the strike price, and that “certain date” is called the expiration date. A call option is defined […]