What is the best strategy for Nifty option trading?

What is the best strategy for Nifty option trading?

The stop loss should be placed at the low of the closing candle. Similar to the previous bank nifty option trading [ ]strategy, another bank nifty tip is to place the target at twice the height of the candle. For example, if the candle is 50 units, your target should be set at a hundred.

How can I trade Nifty futures and options?

How to trade in Nifty?

  1. Investing in Nifty via Derivatives. Nifty derivative contracts such as futures and options have the said index as the underlying asset.
  2. Investing in Nifty Through Futures Contracts.
  3. Investing in Nifty Through Options Contracts.
  4. Investing in Nifty via mutual funds.

Which is better Nifty futures or options?

If you are completely convinced about a direction, futures will bring more profits. 3. Currently, the lot size in Nifty futures is 50, and the lot size in Nifty options is also 50. If the Nifty lot size , it will modify for both futures and options and will always be same for both.

Is future and option good for trading?

Futures have several advantages over options in the sense that they are often easier to understand and value, have greater margin use, and are often more liquid. Still, futures are themselves more complex than the underlying assets that they track. Be sure to understand all risks involved before trading futures.

What is the safest option strategy?

Safe Option Strategies #1: Covered Call The covered call strategy is one of the safest option strategies that you can execute. In theory, this strategy requires an investor to purchase actual shares of a company (at least 100 shares) while concurrently selling a call option.

Who is the richest option trader?

1. Paul Tudor Jones (1954–Present) The founder of Tudor Investment Corporation, a $11.2 billion hedge fund, Paul Tudor Jones made his fortune shorting the 1987 stock market crash. 3 Jones was able to predict the multiplying effect that portfolio insurance would have on a bear market.

How do you trade in options without losing?

No loss option strategy : “in this strategy, You have to write extreme in the money call and put options at the same time and hold them till expiry. This strategy always pays 10-20% average return on capital”

What is lot size in futures?

It basically refers to the size of the trade that you make in the financial market. In the derivatives market, the lot size of futures and options contracts is determined by the stock exchange from time to time. The lot size of various F&O contracts for a given underlying is always the same.

Which is more profitable options or futures?

Options and Futures both have unlimited profit potential where not even the sky’s the limit. However, while futures provide a simple linear payoff – a trader profits when price action moves in their direction and loses when price action moves against them – options trading in non-linear.

Which one is safe futures or options?

While a future is an agreement to buy or sell a security at a certain time in the future for a specified price, an option gives one the right but not the obligation to do the same.

How much money is required for future trading?

In futures trading, you must put down from 2 to 10 percent of the contract value as margin, which acts as collateral and is mandated by the futures exchanges. Initial margin is the amount needed to open a futures position, and the amount varies with the type of futures contract and the policies of the futures exchange.

Which option strategy is most profitable?

The most profitable options strategy is to sell out-of-the-money put and call options. This trading strategy enables you to collect large amounts of option premium while also reducing your risk. Traders that implement this strategy can make ~40% annual returns.

Why should you trade in NIFTY options?

The advantage of trading in Nifty future and Nifty Option: 1. 2. Fewer margins: For nifty future, the margin required to take a position is just 8%. Highly liquid options: Due to high liquidity in Nifty options, it becomes easy to research and take a trading call. Hedge against stock portfolio: As Nifty being a benchmark index and most of the stocks reflect the same trend.

What are Nifty options?

Nifty Options is a derivative instrument wherein the underlying asset is Nifty; like Nifty50 futures it also has lot size 75, different strikes and multiple expiry periods. It is a derivative like Futures but unlike Futures your profit/loss will not be linear depending on the up move/down move in NSE NIFTY.

What is ‘underlying’ in options trading?

An underlying option security is a stock, index, bond, currency, or commodity on which an option’s value is based. It is the primary component of how the option gets its value. This is the reason why options are classed as derivatives. They derive their value from the performance or price action of an underlying security.

What are Nifty options, call options?

Nifty Option Chain is divided into two parts: call options and put options. Call options: Call is an option contract that gives you the right but not the obligation to buy the underlying asset at a predetermined price before or at the time of expiry.