There are a lot many bullish strategies out there where one can follow when Nifty is falling. However, one particular strategy makes me more interested from a risk-reward perspective. It is a three-legged strategy that can be executed if you know the clear support zones in Nifty.
Bearish Diagonal Call spread is neutral to a bearish strategy which is executed by buying long-dated in the money put option and concurrently selling short-dated out of the money put option.
Bearish Diagonal Call spread is neutral to bearish strategy which is executed by buying long-dated in the money call option and concurrently selling short-dated out of the money call option.
As discussed in the Option Volatility Strategies Webinar, Long Straddles option strategies are not frequently used trading strategies due to the nature of premium decay in options. Long Straddles can be initiated when the trader is expecting a sudden surprise price action (most during events) or strongly implied volatility pickup, Near to Expiry with potential Gamma price action moves.
Cash Secured Puts is a simple way to acquire stocks for investment at a lower price than the current Market Price. It involves selling out of the money put options and simultaneously holding enough cash to purchase the stock at lower price.
When there is a planned event like RBI announcement, FOMC meeting, Earnings Result, Major political events like Election results, BR Exit kind of scenarios options price tends to move higher as the implied volatility of the options gets a ramp up before any such binary event. The reason for such ramp up in option volatility is the investors getting into hedging mode due to the uncertainty of the event and speculators betting on the future directional move which causes the Implied volatility to spike up.
OptionAction (OAWeb) is a web based Option Analysis tool which lets you to build and analyze option strategies for Indian Stock Markets. It provides most of the analytics required for a option trader to practice and implement their option strategies. Recent launch of web based interface is modern, responsive and full-fills most of the option traders criteria. The Best part of the OAWeb is Good user interface ability to create trading strategies via Mobile/Tablet with great user experience as it is designed to utilize the app in a user friendly way.
Just upgraded Option Action Beta Version from 184.108.40.206 to 220.127.116.11 and the new interface is cool and interesting filled with meaningful addition which is essential for a trader. It has a cool dashboard with Nifty, Bank Nifty, SGX Nifty, Small Cap, Mid Cap, India VIX.
In this video tutorial we will explore the basic features and functionalities of Option Action, How to create option strategies and how to interpret the payoff graph.
We know that Open Interest is nothing but the total number of outstanding contracts. And for Options we have Open Interest for every individual strike price. It is a myth that 90% of the option expire worthless. Textbooks, Internet & even most of the option experts preach that option writing is smarter than buying options . But is that true?
OptionAction is a Option Analysis tool which lets you to build and analyze option strategies for Indian Stock Markets. It provides most of the analytics required for a option trader to practice and implement their option strategies. Though it is a simple tool with cool UI interface you can build any complex option strategies with the available pre built option templates.