Go for only NIfty Options Call Put, Only First Buy, Buy Call or Put and Square OFF, do not sell first. This is less risky than any other intraday trading plan and Trade on Nice Buy Sell Algo Signals.
1. Problems with Equity Holdings:- Huge amount required for trading and if that particular stock or sector goes down u have to wait for years to recover your money. You can not make profits if market goes down.
2. Problems with Equity Intraday:- Some amount is required, but it is stock specific and sector specific. (This type of trading some what OK, buy trade with research and Nice Buy Sell Alogo Signals).
3. Problems with Futures:- This is the most dangerous, I dont want to try this at all
4. Problems with Stock Options:'- Again it is stock specific and sector specific.
5. Advantages with Index (Nifty, Bank Nifty) Options: - Less amount required, Can keep for 1 month, and can get profit, if market moves either way. BUT NEVER SELL CALL or PUT FIRST (Losses will be very high if sell first).
6. The best Option is NIFTY OR BANK NIFTY CALL PUTS ONLY BUY (That too ATM or near to ATM, which are liquid). (That too prepare an ALGO Buy sell signal AFL for this or subscribe).
Read My Story of Trading
How Iam doing NIFTY Options Call Put Intraday Trading? What is my Strategy? What You need?
1. Basic Understanding of Index options, Call Put etc.
2. Good PC and or Laptop with UPS (In case of power failure)
3. Broadband Internet/ 3G Net connection.
4. TV with CNBC Channel (For latest news)
5. Good Android smart phone with 3G Internet and required App's.
6. Good Discount brokerage Account which charges you less brokerages. (Iam Using Zerodha).
7. After having everything set, what do you want. Most Importantly you need some tips from somewhere. Generally small investors trade on news seen on TV. They just watch CNBC or some other channel and makes their own decision to trade. But I have seen that they generally make losses with this approach. Small Investors always think that there are people inside market who can give valuable tips about doing intraday trading. After reaserching in Internet about these tips, I found that these tips do not serves the purpose.
8. I have subscribed for famous intraday tips for Rs 10000 (Oh my god) for one month, He generally gives one tip in a day. I was trading with major brokerage with 3 in 1 account. After one month trading, what i can see is Rs 10000 for TIPS + Rs 22500 for Brokerage + Rs 2500 Loss = A total loss of Rs 35000.
9. Tips worked for only half time, so what you got is what you loose and some dynamic trading by me made 2500 loss.
10. I have paid Rs 22500 as brokerages (Can u believe this?).
11. Paid Rs 10000 for tips.
After that I have changed my plan stopped trading for a month and checked what went wrong with me? I got this
12. I came to know that in Intraday trading, brokerage commission will play an important role, it adds to the buying cost of a stock / future / option . If it’s high then it would be difficult for the trader to make some good profit intraday. So I have Immediately shifted to zerodha. Zerodha he charges Rs 20 each order irrespective of size of order. (Check the brockerages now with automatic calculator.)
13. And most importantly i have shifted to a wonderful Automatic buy sell signal software based on Amibroker AFL Formaula. Which generates buy and sell signals in live market and its very cheap. Rs 1000 only for Equity/F&O. So i have subscribed and started trading.
14. Now my life has changed, I have made Rs 10500 Profit after paying brokerages of Rs 2500 only and Rs 1000 for Automatic buy sell signal.
15. Several times I have missed heavy profits because i have squared off early. Now I got confidence and making nice profits.
16. Zerodha + Buy Sell Software = Profits.
Thanks and Happy trading.
Visit my blog for tips
Options gives you the right but not the obligation to buy/sell the underlying at a specific price (strike price). Options are popular because all you need to have a stake in the contract is to pay a premium amount. Premium is paid to reserve your write to buy/sell the underlying at the strike price of your choosing.
If you want to BUY the underlying (say Nifty Index) you need to buy a CALL Option.
If you want to SELL the underlying, you need to buy a PUT Option.
Suppose you are expecting Nifty to rally from 7800 levels, you will need to buy a CALL Option. To buy this, a premium needs to be paid which is relatively much cheaper than equity or futures.
If Nifty rallies as you had predicted, the premium amount you had paid will increase, reflecting the movement of the underlying.
Eg: You bought a CALL Option for Nifty at 7800 for Rs. 100, the next day Nifty rallies to 7900.. the increase is reflected in the price of premium, it may now amount to Rs. 200. An exit of such a trade would give you a 100% return.
In theory you paid Rs. 100 to get the right to buy Nifty at 7800, hence when the value of Nifty increased to 7900, you are 'in the money' as you have the option to buy Nifty for 7800 instead of 7900.. and the person who sold you the contract (remember for any derivative contract there has to be 2 parties with the opposite view. So if bought a CALL option, someone had to sell that CALL Option. Selling a Call/ Option is called Option Writing). Hence this person is obligated to sell to you at 7800, even though the current price of Nifty is 7900. Which will be a profit for the Option Buyer and a Loss for the Option Writer.
For more on options and trading strategies check out: http://zerodha.com/varsity/module/option-theory/
Why is Futures dangerous? Any specific reasons?
If you go for options first Buy, i.e Buy Put or Buy Call only, If you bought call at a premium of Rs 70, 1 Lot Qty 25x 70 = 1750 Rs
If Market goes against you/goes down (1000 or 2000 points) after bying above call. Maximum you will loose only Rs 1750. But in the case of futures you will make infinite lossess.
Can you please let me know what are the parameters to select options trading…