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Wednesday, December 3, 2014

Trading Strategy - Call Option, Put Option | Option Pricing

trading strategy call option
Neutral strategy suits best when you cannot identify the market trends, also for those who need consistent profits with small investment.
Hence I have chosen to experiment on Long Straddle with Nifty Options for the Month of Nov 2014.
Nifty contract for Nov 27th 2014 made High 8216, Low 8102, closed at 8198.
I have taken midway at 8150 and implemented the same with Nifty Call 8150 and Nifty Put 8150 with below calculations.

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ALSO READ: Long Straddle March 2015

  • Bought Nifty CE 8150 at Rs.100.00 (near to day's low) x 2 lots
  • Bought Nifty PE 8150 at Rs.86.00 (near to day's low) x 2 lots

So overall investment of Rs.9500.00 which includes Brokerage plus tax. 21st Nov 2014, this strategy has given result of Rs.10522.00 (excluding tax). Also you can use below worksheet with different permutations and combinations to achieve different results.



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6 comments:

  1. I have bought many books on trading stocks and options and have been trading for almost 4 years. None of the material was really helping in my trading. I wish I had this article before I started option trading because I would have saved a lot of money and probably made some too! I lost over 5,000 dollars on my trades from last year. This year with using the methods described on your blog, I invested 20,000 dollars and made over 8 percent the first month!!!! Keep on sharing!!!

    ReplyDelete
    Replies
    1. Hi Tim,
      Thanks for the reply also good to know about your recent changes in your trading methodologies, I will be coming with new blog which is dedicated for Capital Markets and includes Equity, Commodity segments, latest news and techniques

      Delete
    2. Also check my new blog http://stockmarketliveindia2.blogspot.com, for FREE live charts, strategy ideas and many more

      Delete
  2. Nice piece of information… I want to start option trading. I don t know where to go to learn the basics. Also, which is the best type of trading for the beginner? Forex, binary options or penny stocks? I have only a couple hundred us dollars to work with. I tried making a demo account and got so confused with the layout. Someone please help!!!!!

    ReplyDelete
    Replies
    1. Hi Smith,
      Thanks for your comment, I would recommend you www.investopedia.com where you can learn basics and techniques.
      Initially I would recommend you start only with investing for short term to medium term and do not try day trades or options since its more with risk and time so.
      Also I will be starting new blogger blog about capital markets in coming days, so keep visiting my blogs and welcome your questions so that I get an chance to share my knowledge

      Delete
    2. Also check my new blog http://stockmarketliveindia2.blogspot.com, for FREE live charts, strategy ideas and many more

      Delete

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