Stock Option Trading Strategies

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Stock Option Trading Strategies
Stock options are widely traded instrument in globally stock market and are highly popular in Indian stock market aswell. Traders who have low margin often trades in stock options for quick profit.  When we buy stock options we buy it in lot’s and it have same expiry as of the main stock in futures that is stock options have monthly expiry not weekly expiry, So trading stock options is quite easy as compared to trading in index options which got weekly expiry as off now. 

When we trade stock options that are when we buy Call or Put that is CE or PE of stock options we buy it as per stock trend. If stock is showing bullish pattern traders often buy Call (Stock option CE) and when trend is bearish it’s time for PE that is Put Option.  Strike price selection plays critical role in stock options too. One should avoid buying Out of Money contracts however if expiry is far it do make sense to go with OTM contracts also.

Stock options have clear strategies to deal in Bullish market, Bearish market and in consolidating market.  Traders should never ignore placing stoploss in stock options as stock options trading got potential to deliver huge profit aswell as huge loss at the same time.

Here are names of few most commonly options trading strategies used by options traders:

• Covered Call
• Protective Put
• Long Straddle
• Iron Condor
• Bull Call Spread
• Bear Put Spread
• Calendar Spread

Sharetipsinfo will cover all above separate options trading strategies in details in other article from where options traders can easily understand all options trading strategies with an example for better understanding.

No matter traders trade in Index options or stock options, aim is clear to earn profit however when it comes to option trading many traders often lose money primarily for one simple reason that is they don’t put stoploss in place so contracts become zero specially in Index option where it got weekly expiry.

Trades trading in Options should seek expert advice as options trading are one of the most complex forms of trading where probability of profit/loss is very high so experts can help traders with the right strategy for optimizing the profit.

 

Are you looking for Trading Tips on the GO of Stock Market, Options-Index Options and Stock Options, Commodity. Download SHARETIPSINFO APP NOW