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Learn 5 ways to make Money from options trading Easy and Simple.....



5 ways to make money from options I.e. call and put For basic of Derivative learning click Here




1) Buy Both call and put :



Buying both call and put during volatile market makes trader rich. Many times due to huge uncertainty one cannot decide direction of stock movement but expecting huge movement either side. During such period one can take position in both side and make huge money.
Example: on 19th June India Bull housing was the stock moved almost 25% in a day. During market hours suddenly premium of option goes up around 10 am while implied volatility was near 68 goes to 75 without any news.  It was the point one can initiate position and stock started falling around 11:15 am and implied volatility reach at 140, premium run like anything. Moreover, straddle of India bull reach at 25% while expiry is on 27 June it mean just 8 days and at the time money call and put premium total near 25%. Buyer made huge money.
Another example I am sharing is jet airways on 20th June I made an history of highest % increase in a day. The call of jet strike 60 was available at 10 paisa made high of 15 rs. It means 150x in a day. But it was in banned stock so no one can initiate new position.
 For more learning on this concept here call and put strategy.




2) sell both call and put option :

Generally, short position is preferable for index due to less impact cost and liquidity. 
One survey suggest that 90% of option seller made money by shorting premium. Being a wise investor many times we think selling nifty option having 3% straddle is foolish strategy. But can you earn 3% per month even earning 3% is bad amount. One of the study suggest that except event months like election, budget and such critical announcement month remaining months a trader short 300 point far call and put made average 2% p.m. Nowadays, nifty and bank nifty having weekly option available but I will suggest to work next week only like expiry on 27 June do position in 4 July once it expiry carry forward to next week. Why?

On the expiry days generally the theory of max pain works, option seller never lose battle in any case someone due to huge buying or selling such level goes wrong and nifty may witness huge short covering or short selling. Many people earn lakhs of money from weekly option. Study 10 times max pain theory learn, relearn and apply is only way to earn from market.



3) sell naked call:

Many times long term investor having huge investment in blue chip company like infy, TCS or reliance. Start selling put option every month and earn premium on it. Over a period of time it will reduce the cost of shares. Even dividend is also another Avenue for such stock.
Do short 10% far call option every month.


4) sell naked put:
On 20th June or 21st June trader who short 20 strike jet airway put around 6-8 Rs. and think of buying 2200 shares in case it reach to 12-13 Rs. For buying 2200 shares of jet @ 13 needs almost 28000 Rs. while closing of 13 or above is profit for trader. In case jet close above 20 the profit one can earn per option lot of 20 put was 15000 Rs.. For investment of 28k against profit of 15k.

One can do such strategy in Rel infra, Rel capital, yes bank, Jain irrigation and many moreOnly point should be in mind is one should have money to buy full lot of equity in case stock cross decided limit.

Let's think more in deep in case I initiate my strategy by selling 100 put option of yes bank @ 8 Rs. and stock goes below 92 and I bought 1750 shares @ 92. Now stock reach at 85 what should I do?

Well, from next month onward start selling call option of 95 strike regularly at 4-5 rs. Premium.

Well, I did same thing and stock close next month at 130 I earn only 5 rs. Premium only right ? Now my costing of yes bank came at (92-5) Rs. is equal to 87 but I am in loss in call which i sold so my cost will consider closing price of share on expiry. Now next month i will sell 130 strike call option at 10-11 Rs. due to higher price. So, my earning will increase in case stock move sharply. I will make 17500 rs.
In case stock close below my cost I will sell 95 strike call. This strategy is excellent if you have money of buying stock for full lot.


5) Buy put sell call with future hedging buy as per (click here) Deltavalue  :

This is excellent strategy I have ever seen till date for few events.
Start this strategy when stock moved 10 or more down in any day example : I bull housing goes down 20% buy put near 480-460 when stock was near 490 and sell call of 600 or 580 and buy future as per delta value. When stock goes up implied volatility of put might remain same but call option implied volatility must reduce 10-15% for sure and reverse position I will give excellent return. Same thing happen in UPL Ltd on 20th June as it was down almost 12-13% implied volatility of call was at 80 and put was at 85 today on 21st June UPL was up 3% and reach 900 rs. Today call implied volatility was at 55 and put strike around 840 and 820 was near 75 so, call premium reduce much more compare to put and future will be in buy. So, this is very very excellent strategy for such situation. Even downside risk always limited in this strategy while premium always be willed in downside only up side it always stable.
learn full strategy  click 

For any query comment here or mail me at derivativelearn@gmail.com



Happy Reading
Derivativelearn.


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