Saturday, 5 October 2019

How do we identify good option writing opportunities?

Following are some of the indicators that can be used to identify good options writing opportunities:
  1. Implied Volatility: This is one the Options Greeks, and is also one of the main components in Options Pricing. While there is no upper limit to which IV of any option contract can go, keeping a track on a daily basis can give a fair idea of the range in which the IV of an individual option contract trades. Whenever you see the IV breaking its upper range, you can Short the option. The success rate using this indicator is relatively high, as IV tends to relax after breaking out, giving a faster decay in options premium. This can also be used with Delta hedging strategy, to avoid naked options writing. To the best of my knowledge, historical IV is not available, or is available in “paid data” form by certain vendors. So, in order to make best use of this strategy, you may have to start tracking IVs of the contracts you wish to trade in, and then trade accordingly.

Thursday, 3 October 2019

What are the stocks that play a vital role in the movement of Nifty 100?

Nifty 100 comprises of 100 stocks, having different weightage in the index.
Top 10 stocks with maximum weightage are:
  1. HDFC Bank Ltd: 9.30%
  2. Reliance Industries Ltd : 8.26%

Monday, 30 September 2019

How do you handle stress and control your emotions while trading in stock market?

Have it figured out before entering the trade.
  1. Plan your trade and then trade your plan
  2. If you know your entry and exit points (either the stop loss getting hit or the trade gets in your favor), there is no reason to be stressed at all.

Wednesday, 25 September 2019

What are the terms and concepts that one needs to know before starting a career in the stock market trading floor?

Anything is quite easy to learn if one is genuinely interested in it.
While the terms and concepts can be a bit tricky, starting from the very basics can help you along the way.
There are three different markets where you can trade. Equities, Futures and Options. Since F&O (Futures and Options) instruments are essentially based on the underlying equities, it’ll be better if you make yourself comfortable with the basics of equities market, initially. This shall include terminologies, trading concepts and settlement system.

Monday, 23 September 2019

Why do most of the traders trade in Futures and Options (F&O)?

Futures & Options (F&O) are leveraged products allowing traders to do ‘more with less’
As a result, profit potential of the trader increases.
Options offer maximum leverage on a given trade with a given corpus of capital, whereas Futures offer lower leverage, comparatively.

Wednesday, 18 September 2019

What is the difference between nifty and BankNifty?

While both of these are benchmark indices, Nifty covers 13 sectors of the economy in which various companies operate, Bank Nifty is an index for banking sector only.

Saturday, 14 September 2019

How can I open a Trading and Demat Account? What are the necessary documents required?

Opening a Trading and Demat Account is fairly hassle-free days. The process is simple.

Following are the two ways to open your account:

1. Physical Application Form:

In this, you need to fill up a form and submit it to the Broker with whom you're opening your account. This requires the following documents:

How can I convert my stock trading from a pure gambling to an educated and intelligent technically analyzed trading?

The answer to this lies in your framing of the question itself, ‘educated and intelligent technically analyzed trading’
I firmly believe that every individual has his own style, risk profile and certain way of reactions to volatility and favourable and unfavourable trade positions. Since you’ve anyway realised that you must stop gambling and shift to a scientific analysis based trading, you should try and analyse your own behaviour and responses to market conditions vis-a-viz your trades and develop your trading style.