Options Trading Basics and Strategies

Options Trading Basics and Strategies

Options Trading Basics and Strategies Along with Frequently Asked Questions FAQS

Master the essentials of Options Trading. In this Webinar, we discuss basics & strategies allowing you to buy or sell stocks, ETFs etc. at a specific price within a specific date. Along with a Q&A session that will answer all your technical and stock-specific questions.

All your questions answered­­­

Q.­­1) How can we track the Market trend from Option chain?

You can search on Google for NSE option chain and you will get it.

Q.2) Which is nifty spot price?

Nifty spot price is the current market price of nifty in the cash market.

Q.3) Do I have to pay margin if I buy call 1450 & sell 1500 call?­­

Yes, because you are selling call option.

Q.4) What is OTM?

OTM is out the money options. In call options, if your current market price is less then strike, then the price is called OTM in call option and vice versa in put options

Q.5) What is liquid or illiquid options?

Liquid options are those options where the volume of options is more.

Q.6) What is open interest?

Open interest is a total number of outstanding contracts.

Q.7) How to check liquidity?

In NSE options chain – Volume

Q.8) If the stock price of RIL is 1400, then do we have to select buy strike price of CE 1400 or PE 1400 and not CE 1450 (predicting if it will go up or PE 1350 predicting it will go down)?

If you are expecting the price of a stock to go up, then you buy ATM call option and vice versa.

Q.9) Is loss is pre-defined?

If you are buying options then your loss is limited to the premium you paid.

Q.10) If one is having 100 shares and a minimum lot is 250, will it be risky?

Yes, because you are hedging 100 shares with 250 shares

Q.11) What is breakeven?

Break-even is a point when there is no profit no loss.

Q.12) Which strike price is good for selling put or call for any stock?

Mostly OTM strike prices

Q.13) Which is the best day to trade in options. First or the last day of expiry?

There is nothing like any special day to trade options, if you have a one day view on a stock that it will go up in intraday then you can go for naked call options and if you have a positional view then you can go for options strategies like bull call spread or bear put spread.

Q.14) Is it better to buy the monthly expiry to cancel the time decay?

Yes, because of theta.

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