Troca de opções em telugu

Opção de negociação em telugu
Investidores enriquecedores desde 1998.
Soluções de Negociação rentáveis ​​para o Investidor Inteligente.
Guia para opções para novatos.
O que é uma opção?
Uma opção é um contrato que dá ao comprador o direito, mas não a obrigação, de comprar ou vender um ativo subjacente (uma ação ou índice) a um preço específico em ou antes de uma determinada data.
Uma opção é uma derivada. Ou seja, seu valor é derivado de outra coisa. No caso de uma opção de compra de ações, seu valor é baseado no estoque subjacente (capital próprio). No caso de uma opção de índice, seu valor é baseado no índice subjacente (equidade).
· As opções listadas são títulos, como ações.
· Opções negociam como ações, com compradores fazendo lances e vendedores fazendo ofertas.
· As opções são negociadas ativamente em um mercado listado, como ações. Eles podem ser comprados e vendidos como qualquer outra segurança.
· As opções são derivadas, ao contrário dos estoques (ou seja, as opções derivam seu valor de outra coisa, a segurança subjacente).
· As opções têm datas de validade, enquanto as ações não.
· Não há um número fixo de opções, pois existem ações disponíveis.
· Os proprietários de ações possuem uma participação da empresa, com direitos de voto e dividendos. As opções não transmitem tais direitos.
Algumas pessoas ficam perplexas com as opções. A verdade é que a maioria das pessoas tem usado opções por algum tempo, porque a opção-ality é incorporada em tudo, desde hipotecas até seguro automóvel. No mundo das opções listadas, no entanto, sua existência é muito mais clara.
Tipos de expiração.
Existem dois tipos diferentes de opções em relação à expiração. Existe uma opção de estilo europeu e uma opção de estilo americano. A opção de estilo europeu não pode ser exercida até a data de validade. Uma vez que um investidor comprou a opção, deve ser mantido até o vencimento. Uma opção de estilo americano pode ser exercida a qualquer momento após a compra. Hoje, a maioria das opções de ações negociadas são opções de estilo americano. E muitas opções de índice são de estilo americano. No entanto, existem muitas opções de índice que são opções de estilo europeu. Um investidor deve estar ciente disso ao considerar a compra de uma opção de índice.
Uma opção Premium é o preço da opção. É o preço que você paga para comprar a opção. Por exemplo, uma chamada XYZ 30 de maio (assim, é uma opção para comprar ações da empresa XYZ) pode ter uma opção premium de Rs.2.
O preço de greve (ou exercício) é o preço ao qual o título subjacente (neste caso, XYZ) pode ser comprado ou vendido conforme especificado no contrato de opção.
A data de expiração é o dia em que a opção não é mais válida e deixa de existir. A data de validade de todas as opções de ações listadas nos EUA é a terceira sexta-feira do mês (exceto quando cai em um feriado, caso em que é na quinta-feira).
As pessoas que compram opções têm um Direito, e esse é o direito ao Exercício.
Quando um detentor de opção escolhe exercer uma opção, um processo começa a encontrar um escritor que é curto o mesmo tipo de opção (isto é, classe, preço de exercício e tipo de opção). Uma vez encontrado, esse escritor pode ser atribuído.
Existem dois tipos de opções - chamar e colocar. Uma chamada dá ao comprador o direito, mas não a obrigação, de comprar o instrumento subjacente. A colocação dá ao comprador o direito, mas não a obrigação, de vender o instrumento subjacente.
O preço predeterminado sobre o qual o comprador e o vendedor de uma opção concordaram é o preço de exercício, também chamado de preço de exercício ou o preço de destaque. Cada opção em um instrumento subjacente deve ter preços de exercício múltiplos.
Opção de compra - o preço do instrumento subjacente é maior do que o preço de exercício.
Opção de colocação - o preço do instrumento subjacente é inferior ao preço de exercício.
Opção de compra - preço do instrumento subjacente é inferior ao preço de exercício.
Opção de venda - o preço do instrumento subjacente é maior do que o preço de exercício.
O preço subjacente é equivalente ao preço de exercício.
As opções têm vidas finitas. O dia de validade da opção é o último dia em que o proprietário da opção pode exercer a opção. As opções americanas podem ser exercidas a qualquer momento antes da data de validade, a critério do proprietário.
Uma classe de opções é todas as colocações e exige um instrumento subjacente específico. O que uma opção oferece a uma pessoa o direito de comprar ou vender é o instrumento subjacente. No caso de opções de índice, o subjacente deve ser um índice como o Índice Sensível (Sensex) ou S & amp; P CNX NIFTY ou ações individuais.
Uma opção pode ser liquidada de três maneiras: fechar compra ou venda, abandono e exercício. Comprar e vender opções são os métodos mais comuns de liquidação. Uma opção dá o direito de comprar ou vender um instrumento subjacente a um preço fixo.
Os preços das opções são definidos pelas negociações entre compradores e vendedores. Os preços das opções são influenciados principalmente pelas expectativas de preços futuros dos compradores e vendedores e pelo relacionamento do preço da opção com o preço do instrumento.
O valor do tempo de uma opção é o valor que o prémio excede o valor intrínseco. Valor de tempo = Opção premium - valor intrínseco.
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• Uso deste site e / ou produtos e amp; Os serviços oferecidos por nós indicam sua aceitação de nosso aviso legal.
• Disclaimer: Futures, option & amp; A negociação de ações é uma atividade de alto risco. Qualquer ação que você escolher para levar nos mercados é totalmente sua própria responsabilidade. TradersEdgeIndia não será responsável por quaisquer danos, diretos ou indiretos, conseqüenciais ou incidentais ou perda decorrentes do uso dessas informações. Esta informação não é uma oferta de venda nem solicitação para comprar qualquer dos valores mencionados neste documento. Os escritores podem ou não estar negociando os títulos mencionados.
• Todos os nomes ou produtos mencionados são marcas comerciais ou marcas registradas de seus respectivos proprietários.

Opção de negociação em telugu
Com a possível exceção dos contratos de futuros, a negociação não é um jogo de soma zero. Em outras palavras, para cada vencedor não precisa haver um perdedor. Portanto, porque existem tantas combinações e formas diferentes as opções podem ser protegidas uma contra a outra, não faz sentido olhar para figuras gerais (por exemplo, o número de opções que expiram sem valor) e chegar a conclusões sobre quantas pessoas fizeram ou dinheiro perdido.
Por simplicidade, vamos tomar o caso de uma propagação. O fato de uma pessoa ganhar dinheiro comprando uma borboleta não significa automaticamente que outra pessoa perdeu. Em vez disso, a pessoa que vendeu a borboleta pode ter negociado fora do cargo usando spreads ou vendendo opções individuais. Para cada pessoa que é longa uma borboleta, a propagação de chamadas, a propagação ou o que quer que seja, não há necessariamente pessoas que são curtas na posição correspondente. Como tal, a rentabilidade de suas posições diferirá necessariamente.
Em muitos aspectos, a opção de negociação é um jogo de estratégia diferente dos competitivos ou dos torneios de xadrez. A principal diferença é que na negociação há mais jogadores e agendas múltiplas. Para ter sucesso, é importante ter um conhecimento e apreciação dos outros jogadores. Em termos gerais, você deve obter uma apreciação pelo comportamento e motivações dos diferentes jogadores.
Nos mercados de opções, os jogadores dividem-se em quatro categorias: Investidores da Instituição Financeira de Intercâmbios Investidores individuais (varejistas).
O que se segue é uma breve visão geral de cada grupo, juntamente com informações sobre seus objetivos comerciais e estratégias.
A troca é um pblace onde os criadores de mercado e os comerciantes se reúnem para comprar e vender ações, opções, títulos, futuros e outros instrumentos financeiros. Desde 1973, quando o Chicago Board Options Exchange iniciou as opções de negociação, surgiram vários outros jogadores. Em primeiro lugar, as trocas mantiveram listas separadas e, portanto, não trocaram os mesmos contratos. Nos últimos anos, isso mudou.
Agora que a BSE e a NSE, ambas as trocas, listam e comercializam os mesmos contratos, eles competem uns com os outros. No entanto, mesmo que um estoque possa ser listado em trocas múltiplas, uma troca geralmente lida com o volume do volume. Isso seria considerado a troca dominante para essa opção particular.
A concorrência entre trocas tem sido particularmente valiosa para comerciantes profissionais que criaram programas de computador complexos para monitorar discrepâncias de preços entre as trocas. Essas discrepâncias, embora pequenas, podem ser extraordinariamente lucrativas para os comerciantes com capacidade e velocidade para aproveitar. Na maioria das vezes, os comerciantes profissionais simplesmente usam trocas múltiplas para obter os melhores preços em seus negócios.
Decidir entre os dois seria simplesmente uma questão de escolher o intercâmbio que faz a maioria das negociações neste contrato. Quanto mais volume a troca faz, mais líquido é o contrato. Uma maior liquidez aumenta a probabilidade de que o comércio seja preenchido ao melhor preço.
As instituições financeiras são empresas de gerenciamento de investimentos de âmbito público que tipicamente se enquadram em várias categorias principais: fundos mútuos, hedge funds, companhias de seguros, fundos de ações. Em cada caso, esses gerentes de dinheiro controlam grandes carteiras de ações, opções e outros instrumentos financeiros. Embora as estratégias individuais diferem, as instituições compartilham o mesmo objetivo - superar o mercado. Em um sentido muito real, seu sustento depende do desempenho porque os investidores que compõem qualquer fundo tendem a ser um grupo inconstante. Quando o fundo não funciona, os investidores geralmente são rápidos em mover dinheiro em busca de retornos mais altos.
Onde os investidores individuais podem ser mais propensos a trocar opções de capital relacionadas a ações específicas, os gestores de fundos costumam usar opções de índice para melhor aproximar suas carteiras globais. Por exemplo, um fundo que investe fortemente em uma ampla gama de ações de tecnologia usará as opções NSE Nifty Index, em vez de opções separadas para cada estoque em sua carteira. Teoricamente, o desempenho deste índice seria relativamente próximo do desempenho de um subconjunto de ações de alta tecnologia comparáveis ​​que o gerente do fundo poderia ter em sua carteira.
Os fabricantes de mercado são os comerciantes no chão das trocas que criam liquidez, fornecendo mercados de dois lados. Em cada contador, a concorrência entre fabricantes de mercado mantém o spread entre a oferta e a oferta relativamente estreita. No entanto, é o spread que compensa parcialmente os criadores de mercado pelo risco de tomar voluntariamente qualquer lado de um comércio.
Para os fabricantes de mercado, a situação ideal seria "escalar" todas as trocas comerciais. Na maioria das vezes, os fabricantes de mercado não se beneficiam de um fluxo infinito de trocas perfeitamente compensadoras para o couro cabeludo. Como resultado, eles têm que encontrar outras maneiras de lucrar. Em geral, existem quatro técnicas de negociação que caracterizam o quanto diferentes fabricantes de mercado negociam opções. Qualquer ou todas essas técnicas podem ser empregadas pelo mesmo fabricante de mercado, dependendo das condições de negociação. Day Traders Premium Sellers Spread Traders Theortical Traders.
Os comerciantes de dias, dentro ou fora da tela de negociação, tendem a usar pequenas posições para capitalizar o movimento do mercado intra-dia. Uma vez que seu objetivo não é manter uma posição por períodos prolongados, os comerciantes do dia geralmente não cobrem opções com o estoque subjacente. Ao mesmo tempo, eles tendem a estar menos preocupados com o delta, a gama e outros aspectos altamente analíticos do preço das opções.
Assim como o nome implica, os vendedores premium tendem a concentrar seus esforços vendendo opções de alto preço e aproveitando o fator de decadência do tempo comprando-os mais tarde a um preço mais baixo. Esta estratégia funciona bem na ausência de balanços de preços grandes e inesperados, mas pode ser extremamente arriscada quando a volatilidade dispara.
Como outros criadores de mercado, os comerciantes de propagação muitas vezes acabam com grandes posições, mas chegam lá, concentrando-se nos spreads. Desta forma, mesmo a maior das posições será naturalmente coberta. Os comerciantes espalhados empregam uma variedade de estratégias comprando certas opções e vendendo outras para compensar o risco. Algumas dessas estratégias, como reversões, conversões e caixas, são usadas principalmente por comerciantes de piso, porque eles aproveitam as pequenas discrepâncias de preços que muitas vezes só existem por segundos. No entanto, os comerciantes de spread usam estratégias como borboletas, condores, spreads de chamadas e colocam spreads que podem ser usados ​​com bastante eficácia por investidores individuais.
Ao fazer mercados em dois lados, os fabricantes de mercado geralmente se encontram com posições substanciais de opções em vários meses e preços de exercício. O mesmo acontece com os comerciantes teóricos que usam modelos matemáticos complexos para vender opções que são muito caras e as opções de compra que são relativamente baixas. Dos quatro grupos, os comerciantes teóricos são muitas vezes os mais analíticos, pois estão constantemente avaliando sua posição para determinar os efeitos das mudanças de preço, volatilidade e tempo.
À medida que o volume das opções aumenta, o papel dos investidores individuais se torna mais importante porque representam mais de 90% do volume. Isso é especialmente impressionante quando se considera que o volume de opções em fevereiro de 2000 foi de 56,2 milhões de contratos - um aumento surpreendente de 85% em relação a fevereiro de 1999.
A Psicologia do Investidor Individual.
Do ponto de vista psicológico, os investidores individuais estão em um grupo interessante porque provavelmente existem tantas estratégias e objetivos como indivíduos. Para alguns, as opções são um meio para gerar renda adicional através de estratégias relativamente conservadoras, como chamadas cobertas. Para outros, as opções sob a forma de peças de proteção fornecem uma excelente forma de seguro para bloquear os lucros ou evitar perdas de novos cargos. Mais indivíduos tolerantes ao risco usam opções para alavancagem que eles fornecem. Essas pessoas estão dispostas a trocar opções por grandes ganhos percentuais, mesmo sabendo que todo o investimento pode estar na linha.
Em certo sentido, assumir uma posição no mercado automaticamente significa que você está competindo com inúmeros investidores das categorias descritas acima. Embora isso possa ser verdade, evite fazer comparações diretas quando se trata de resultados comerciais. A única pessoa com quem você deve competir é você mesmo. Enquanto você estiver aprendendo, melhorando e se divertindo, não importa como o resto do mundo está fazendo.
COMO CAIR RISCOS E PROTEGER LUCROS COM OPÇÕES?
Os comerciantes profissionais (conhecidos na indústria como criadores de mercado ou operadores de mercado), muitas vezes pensam que, para o investidor inicial, a negociação de opções deve parecer semelhante à colocação de um quebra-cabeça sem o auxílio de uma imagem. Você pode encontrar a imagem se você souber onde procurar. Olhar através dos olhos de um fabricante de mercado profissional é uma das melhores maneiras de aprender sobre opções de negociação em condições reais de mercado. Esta experiência irá ajudá-lo a entender como as mudanças do mundo real nas variáveis ​​de preços de opções afetam o valor de uma opção e os riscos associados a essa opção. Além disso, porque os criadores de mercado são essencialmente responsáveis ​​pelo que o mercado de opções se parece, você precisa estar familiarizado com seu papel e as estratégias que eles usam para regular um mercado líquido e garantir seu próprio lucro.
Vamos fornecer uma visão geral das práticas dos criadores de mercado e explorar sua mentalidade como arquitetos do negócio da opção. Primeiro, consideraremos a logística das responsabilidades de um fabricante de mercado. Como os fabricantes de mercado respondem à oferta e à demanda para garantir um mercado de líquidos? Como eles avaliam o valor de uma opção com base nas condições e demandas do mercado? Na segunda parte deste capítulo, consideraremos os objetivos orientados para o lucro de um criador de mercado. Como é o mercado como qualquer outro negócio? Como um fabricante de mercado se beneficia? O que significa proteger uma posição e como um fabricante de mercado usa hedging para minimizar os riscos?
A imagem de um terminal de comércio eletrônico não é familiar à imaginação indiana, mas muitas pessoas podem não saber quem são os jogadores atrás da tela. Os fabricantes de mercado, corretores, gestores de fundos, comerciantes de varejo e investidores ocupam terminais de negociação em toda a Índia. Milhares de terminais comerciais em 250 cidades da Índia são combinados, eles representam o mercado para negociação de opções. A própria troca fornece a localização, o órgão regulador, a tecnologia informática e os funcionários necessários para suportar e monitorar a atividade comercial. Dizem que os fabricantes de mercado realmente fazem o mercado de opções, enquanto os corretores representam as ordens públicas.
Em geral, os fabricantes de mercado podem tornar os mercados em até 30 ou mais problemas e competir uns com os outros pelo cliente comprar e vender ordens nessas questões. Os comerciantes do mercado usam seu próprio capital ou comércio para uma empresa que lhes fornece capital. A atividade do market maker, que ocorre cada vez mais através da execução do computador, representa a unidade central de processamento da indústria de opções. Se considerarmos o intercâmbio em si como a espinha dorsal da indústria, a ação nos escritórios de corretagem de Mumbai representa o cérebro e a indústria do setor, o coração. Como um catalisador para o comércio e um lucrativo em seu próprio direito, o papel do fabricante de mercado na indústria vale a pena examinar mais de perto.
Tradutor individual versus fabricante de mercado.
A avaliação do valor de uma opção por comerciantes individuais e criadores de mercado, respectivamente, é a base da negociação de opções. Comerciante e criador de mercado também compram e vendem os produtos que eles prevêem como lucrativos. Nesta perspectiva, não existe diferença entre um criador de mercado e o comerciante de opções individuais. Mais formalmente, no entanto, a diferença entre você eo fabricante de mercado é responsável por criar a indústria de opções, como a conhecemos.
Essencialmente, os criadores de mercado são comerciantes de opções profissionais de grande porte, cujas negociações servem ao público criando liquidez e profundidade no mercado. Diariamente, os criadores de mercado representam até metade de todo o volume de negociação de opções, e grande parte dessa atividade é responsável por criar e garantir um mercado de dois lados composto pelas melhores ofertas e ofertas para clientes públicos. A atividade comercial de um market maker ocorre nas condições de uma relação contratual com uma troca. Como membros da bolsa, os fabricantes de mercado devem pagar taxas e alugar ou possuir um assento no chão para negociar. Mais importante ainda, o relacionamento de um fabricante de mercado com a troca exige que ele ou ela troque todos os problemas que são atribuídos ao seu poço primário no piso da opção. Em contrapartida, o market maker é capaz de ocupar uma posição privilegiada no mercado de opções - os fabricantes de mercado são os comerciantes da indústria de opções; eles estão em posição de criar o mercado (licitar e perguntar) e depois comprar em sua oferta e vender em sua oferta.
A principal diferença entre um market maker e comerciantes de varejo é que a posição do market maker é principalmente ditada pelo fluxo de pedidos do cliente. O fabricante de mercado não tem o luxo de escolher e escolher sua posição. Assim como os fabricantes de livros nos casinos de Las Vegas que definem as probabilidades e depois acomodam os melhores que selecionam o lado da aposta que eles querem, o trabalho de um criador de mercado é fornecer um mercado nas opções, oferta e oferta e, em seguida, deixe o público decidir se quer comprar ou vender a esses preços, levando o outro lado da aposta.
Como comerciantes de opções oficiais, os fabricantes de mercado estão em condições de comprar opção por atacado e vendê-los no varejo. Dito isto, as duas principais diferenças entre fabricantes de mercado e outros comerciantes são que os fabricantes de mercado costumam vender antes de comprar, e o valor de seu inventário flutua à medida que o preço do estoque flutua. Como com todos os comerciantes, porém, uma familiaridade com o produto compensa. Os anos de experiência do mercado com as condições do mercado e as práticas comerciais em geral - incluindo uma série de estratégias de negociação - permitem que ele estabeleça uma vantagem (por mais leve que seja) no mercado. Esta vantagem é a base para a riqueza potencial do fabricante de mercado.
Estilos comerciais inteligentes de operadores de mercado.
Ao longo do dia da negociação, os criadores de mercado geralmente usam um dos dois estilos de negociação: escalar ou negociar posição. Scalping é um estilo de negociação mais simples que um número cada vez menor de comerciantes usa. A negociação de posições, que é dividida em várias subcategorias, é usada pela maior porcentagem de todos os fabricantes de mercado. Como discutimos, a maioria das posições do fabricante de mercado são ditadas pelo fluxo de pedidos do público. Cada fabricante de mercado individual acumulará e protegerá este fluxo de ordem de forma diferente, geralmente preferindo um estilo de negociação em relação a outro. O estilo comercial de um fabricante de mercado pode ter a ver com a crença de que um estilo é mais lucrativo que outro ou pode ser devido à personalidade geral de um comerciante e a percepção de risco.
O scalper geralmente tenta comprar uma opção na oferta e vendê-lo na oferta (ou vender na oferta e comprar na oferta) em um esforço para capturar a diferença sem criar uma posição de opção. Scalpers lucrar com a negociação do que é referido como spread de oferta / oferta, a diferença entre o preço da oferta e o preço do pedido.
Por exemplo, se o mercado no Nifty julho 1130 colocar é 15 (lance) - 15,98 (perguntar), este comerciante irá comprar uma ordem de opção que vem no poço comercial na oferta, juntamente com o resto da multidão. Esse comerciante agora está focado em vender esses itens com lucro, ao invés de proteger as opções e criar uma posição. Devido à falta de comissão paga pelos fabricantes de mercado, esse comerciante pode vender o primeiro lance de 15,20 que entra na turma e ainda ganha lucro, conhecido no setor financeiro como um couro cabeludo.
O comerciante apenas ganhou lucro sem criar uma posição. Às vezes, manter e proteger uma posição é inevitável, no entanto. Ainda assim, esse estilo de negociação geralmente é menos arriscado, porque o comerciante manterá apenas pequenas posições com pouco risco. O scalper é menos comum nos dias de hoje, porque a listagem de opções em mais de uma troca (lista dupla) aumentou a concorrência e diminuiu o spread de oferta / solicitação. O scalper pode ganhar dinheiro somente quando os clientes estão comprando e vendendo opções em quantidades iguais. Como o fluxo de pedidos do cliente geralmente é unilateral (ambos os clientes estão apenas comprando ou apenas vendendo) a capacidade de opções de couro cabeludo é rara. Os Scalpers, portanto, geralmente são encontrados em estoques de negociação de ações que possuem grande fluxo de pedidos de opções. O scalper é uma raça rara no piso comercial, e o advento da dupla listagem e intercâmbios competitivos tornou os scalpers uma espécie ameaçada de extinção.
O negociante de posição geralmente tem uma posição de opção que é criada enquanto aceita o fluxo da ordem pública e cobre o risco resultante. Esse tipo de negociação é mais arriscado porque o fabricante de mercado pode assumir riscos direcionais, risco de volatilidade ou risco de taxa de juros, para citar alguns. Correspondentemente, os criadores de mercado podem assumir uma série de posições relativas a essas variáveis. Geralmente, os dois tipos comuns de comerciantes de posições são backspreaders ou frontspreaders.
Essencialmente, os backspreaders são comerciantes que acumulam (compram) mais opções do que vendem e, portanto, têm potencial de lucro teoricamente grande ou ilimitado. Por exemplo, um longo estrondo seria considerado um backspread. Nessa situação, compramos a chamada de 50 níveis e colocamos (uma greve ATM seria delta neutra). À medida que o activo subjacente diminui em valor, a chamada aumentará de valor. Para que o cargo seja lucrativo, o valor da opção de aumento deve aumentar mais do que o valor da opção em declínio, ou o comerciante deve negociar ativamente o estoque contra o cargo, o estoque de scalping como os deltas mudam.
A posição também poderia lucrar com um aumento na volatilidade, o que aumentaria o valor da chamada e da colocação. À medida que a volatilidade aumenta, o comerciante pode vender a posição para obter opções de lucro ou venda (com maior volatilidade) contra as que ela possui. A posição tem potencial de lucro grande ou ilimitado e risco limitado.
Como sabemos nos capítulos anteriores, existe uma grande quantidade de riscos associados a um inventário de opções. Geralmente, o maior risco associado a uma reversão é a degradação do tempo. A Vega também é um fator importante. Se a volatilidade diminui drasticamente, um backspreader pode ser forçado a fechar sua posição a preços menos favoráveis ​​e pode sofrer uma grande perda. O backspreader baseia-se no movimento no subjacente ou no aumento da volatilidade.
O oposto de um backspreader, o front-foreader geralmente vende mais opções que ele possui e, portanto, tem potencial de lucro limitado e risco ilimitado. Usando o exemplo anterior, o detentor de frases seria o vendedor da chamada de nível 150 e colocou, baixe o nível de 150 níveis. Nessa situação, o fabricante de mercado se beneficiaria da posição se o ativo subjacente não pudesse se deslocar para fora do prêmio recebido para a venda antes do vencimento. Geralmente, o detentor de frases está procurando uma diminuição da volatilidade e / ou pouco ou nenhum movimento no ativo subjacente.
A posição também poderia lucrar com uma diminuição da volatilidade, o que diminuirá o valor da chamada e da colocação. À medida que a volatilidade diminui, o comerciante pode comprar na posição para obter opções de lucro ou comprar (com menor volatilidade) contra os que ele ou ela é curto. A posição tem potencial de lucro limitado e risco ilimitado.
Ao considerar esses estilos de negociação, é importante reconhecer que um comerciante pode negociar o estoque subjacente para criar lucros ou gerir riscos. O backspreader comprará ações à medida que as ações diminuirão de valor e venderão as ações à medida que o estoque aumentar, reduzindo assim o estoque para obter lucro. Scalping o estoque subjacente, mesmo quando o estoque está negociando dentro de um intervalo inferior ao prémio pago pelo cargo, não só pode pagar o cargo, mas pode gerar um lucro acima do investimento inicial. Os Backspreaders são capazes de fazer isso com um risco mínimo porque a posição deles possui uma gama positiva (curvatura). Isto significa que à medida que o activo subjacente diminui no preço, as posições irão acumular deltas negativas, e o comerciante poderá comprar ações contra esses deltas. À medida que o activo subjacente aumenta de preço, a posição irá acumular deltas positivos, e o comerciante poderá vender ações. Geralmente, um backspreader irá comprar e vender ações contra a sua posição delta para criar um couro cabeludo positivo.
Da mesma forma, um detentor de frases pode usar a mesma técnica para gerenciar o risco e manter o potencial de lucro da posição. Uma posição frontspread terá uma gama negativa (curvatura negativa). Manter o Delta neutro pode ajudar um detentor de frente a evitar perdas. Um detentor de fronteiras diligente pode descalgar (scalping por uma perda) o bem subjacente e reduzir seus lucros apenas com uma pequena margem. Salvo qualquer diferença no activo subjacente, a compra e venda disciplinadas do activo subjacente podem minimizar qualquer perda.
Para complicar as coisas ainda mais, um backspreader ou front-foreader pode iniciar uma posição com características especulativas. Seguem dois exemplos.
Esses comerciantes colocam uma posição que favorece um movimento direcional no activo subjacente sobre outro. Este comerciante está especulando que o estoque vai se mover para cima ou para baixo. Este tipo de negociação pode ser extremamente arriscado porque o comerciante favorece uma direção para excluir a proteção do risco associado ao movimento para o outro lado. Por exemplo, um comerciante que acredita que o ativo subjacente tenha sido vendido consideravelmente pode comprar chamadas e vender coloca. Ambas as transações irão lucrar com o aumento do ativo subjacente; no entanto, se o ativo subjacente continuasse para baixo, a posição poderia perder uma grande quantidade de dinheiro.
Os comerciantes de volatilidade geralmente assumirão uma hipótese sobre a direção da volatilidade da opção. Para esses comerciantes, comprar ou vender uma chamada ou não é baseada em uma avaliação da volatilidade das opções. A previsão de mudanças na volatilidade é tipicamente um maior desafio da opção comerciante. Conforme discutido anteriormente, a volatilidade é importante porque é um dos principais fatores usados ​​para estimar o preço de uma opção. Um comerciante de volatilidade irá comprar opções com preço inferior a sua hipótese de volatilidade e opções de venda que estão negociando acima do pressuposto. Se o portfólio for equilibrado quanto ao número de opções compradas e vendidas (opções com características semelhantes, como data de vencimento e greve), a posição terá pouco risco de vega. No entanto, se o comerciante vender mais volatilidade do que ele ou ela compra, ou vice-versa, a posição pode perder muito dinheiro em um movimento de volatilidade.
COMO OS OPERADORES DE MERCADO TRATARÃO O PÚBLICO?
Em geral, o fabricante de mercado começa sua avaliação usando uma fórmula de preços para gerar um valor teórico para uma opção e depois criar um mercado em torno desse valor. Este processo implica criar uma oferta abaixo do valor justo do fabricante de mercado e uma oferta acima do valor justo da opção de mercado. Lembre-se de que o fabricante de mercado tem a responsabilidade legal de garantir um mercado líquido através do fornecimento de um spread de oferta / risco. O público comercial pode então comprar ou vender as opções com base em listas de fabricantes de mercado, ou pode negociar com o criador de mercado por um preço que esteja entre os preços de lances / riscos lançados (com base em seus respectivos cálculos da teoria da opção valor).
Na maioria dos casos, a diferença entre o market maker e as ofertas e ofertas de investidores individuais são uma questão de centavos (o que podemos considerar lucros fracionários). Para o fabricante de mercado, no entanto, a chave é o volume. Como um cassino, o fabricante de mercado gerenciará riscos para que ela possa permanecer no jogo uma vez após outra e fazer um Rs.1 aqui e um Rs.5 lá. Esses lucros se somam. Como o casino, um criador de mercado experimentará perda ocasionalmente; No entanto, através da gestão de riscos, ele ou ela tenta permanecer no negócio o tempo suficiente para ganhar mais do que ele ou ela perde.
Outra analogia pode ser encontrada na relação entre um comprador e revendedor de automóveis usados. Um negociante de carro pode fazer uma oferta em um carro usado por um valor que é menor do que ele é capaz de revender o carro no mercado. Ele ou ela pode obter lucro comprando o carro por um preço e vendendo por um preço maior. Ao determinar o montante que ele ou ela está disposto a pagar, o revendedor deve assumir o valor futuro do carro. Se ele estiver incorreto sobre quanto alguém vai comprar o carro, então o revendedor terá uma perda na transação. Se correto, no entanto, o negociante deve fazer um lucro. Por outro lado, o proprietário do carro pode rejeitar a oferta original do revendedor para o carro e pedir uma maior quantidade de dinheiro, chegando assim entre o mercado de ofertas / riscos do revendedor. Se o revendedor avaliar que o preço que o proprietário solicita para o carro ainda permite um lucro, ele ou ela pode comprar o carro, independentemente do preço mais alto. Da mesma forma, quando um fabricante de mercado determina se ele ou ela pagará (ou venderá) um preço sobre outro, ele ou ela determina não só o valor teórico da opção comprar também se a opção é ou não específico para fins de gerenciamento de risco . Pode haver momentos em que um fabricante de mercado renunciará à vantagem teórica ou ao comércio por uma vantagem teórica negativa com o único propósito de gerenciamento de risco.
Antes de prosseguir com nossa discussão sobre a atividade comercial do fabricante de mercado em detalhes, voltemos a referir a analogia do cassino. A casa em um cassino beneficia em grande parte da sua familiaridade com o negócio dos jogos de azar e do comportamento dos melhores. Como uma instituição, também se beneficia de manter o nível de liderança e certamente de estar bem (se não melhor) informado do que seus clientes sobre a logística de seus jogos e estratégias para ganhar. Da mesma forma, um criador de mercado deve ser capaz de avaliar, em um momento de aviso, como responder a diversas condições de mercado que podem ser tão tangíveis quanto uma mudança nas taxas de juros ou tão intangíveis como um frenesi comercial emocional baseado em um relatório de notícias. Disciplina, educação e experiência são os melhores seguros do mercado. Nós mencionamos isso aqui porque, como investidor individual, você pode usar essas diretrizes para ajudá-lo a competir com sabedoria com um criador de mercado e se tornar um comerciante de opções bem-sucedido.
A criação de mercado como um negócio.
Na seção anterior, abordamos de forma bastante conceitual, como um criador de mercado trabalha em relação ao mercado (e, em particular, em relação a você, o comerciante individual). As práticas reais de um fabricante de mercado são ditadas por uma série de preocupações comerciais de linha de fundo, no entanto, que exigem atenção constante ao longo do dia de negociação. Como qualquer empresário, um fabricante de mercado deve seguir a lógica comercial, e ele ou ela deve considerar os usos mais sábios de sua capital. Há uma série de fatores que você deve considerar ao avaliar se um comércio de opções é uma boa ou má decisão comercial. Na base, as etapas que um fabricante de mercado toma são as seguintes:
1. Determinar o valor justo teórico atual de uma opção. (Como discutimos, o fabricante de mercado pode realizar esta tarefa com o uso de um modelo de precificação matemática.)
2. Tentando determinar o valor futuro de uma opção. Comprando a opção se você acha que aumentará em valor ou vendendo a opção se você acha que irá diminuir em valor. Isso é feito através da avaliação de fatores de mercado que podem afetar o valor de uma opção. Esses fatores incluem: Taxas de juros Volatilidade Dividendos Preço do estoque subjacente.
3. Determinar se o capital pode ser gasto melhor em outros lugares. Por exemplo, se os juros salvos através da compra de uma chamada (em vez da compra definitiva do estoque) excedem o dividendo que teria sido recebido por possuir o estoque, então é melhor comprar a chamada.
4. Cálculo do interesse de estoque longo que é pago pelos fundos de empréstimos para comprar os estoques e considerando se o dinheiro usado para comprar o estoque subjacente seria melhor investido em uma conta com juros. Em caso afirmativo, comprar opções de compra em vez do estoque ser um melhor comércio?
5. Calculando se os juros recebidos da venda de ações curtas são mais favoráveis ​​do que a compra no estoque subjacente. A combinação de possuir chamadas e vender o estoque subjacente é um melhor comércio do que a compra definitiva de colocações?
6. Verificar as possibilidades de arbitragem. Como o passo anterior, esta tarefa implica determinar se um comércio é melhor do que outro. Na seção sobre sintéticos, exploramos a possibilidade de criar uma posição com as mesmas características de lucro / perda que outras usando componentes diferentes. Às vezes, será mais rentável colocar uma posição sinteticamente. Os comerciantes de arbitragem aproveitam os diferenciais de preços entre o mesmo produto em diferentes mercados ou produtos equivalentes no mesmo mercado. Por exemplo, um diferencial entre uma opção e o estoque subjacente real pode ser explorado com fins lucrativos. Os três fatores para basear esta decisão são os seguintes: O nível do ativo subjacente. A taxa de juros.
Por exemplo, se você comprar uma opção de compra, você economiza os juros sobre o dinheiro que você teria que pagar pelo estoque subjacente. Por outro lado, se você comprar uma colocação, você perde o curto interesse em ações que você poderia receber da venda do estoque subjacente.
A taxa de dividendos. Se você comprar uma opção de compra, você perderá os dividendos que você teria obtido segurando o estoque.
7. Finalmente, determinando o risco associado ao comércio de opções.
Conforme discutido anteriormente, todos os fatores que contribuem para o preço da opção são fatores de risco potenciais para uma posição existente. Como sabemos, se os fatores que determinam o preço de uma mudança de opção, o valor de uma opção mudará. Esse risco associado a essas mudanças pode ser aliviado através da compra ou venda direta de uma opção de compensação ou do estoque subjacente. Este processo é referido como hedging.
O posicionamento complexo de um market maker.
Como mencionamos anteriormente, a maior parte da negociação de um market maker não se baseia na especulação do mercado, mas na pequena vantagem que pode ser capturada dentro de cada comércio. Como o criador de mercado deve negociar volumes tão grandes para capitalizar lucros fracionários, é imperativo que ele ou ela gerencie os riscos existentes de um cargo. Por exemplo, para manter a vantagem associada ao comércio, ele ou ela pode precisar adicionar à posição quando necessário comprando ou vendendo ações de um subjacente ou negociando opções adicionais.
Na verdade, não é incomum que, uma vez que o comércio tenha sido executado, o comerciante uma posição de mercado oposta no título subjacente ou em qualquer outra opção disponível. Ao longo do tempo, é estabelecida uma grande posição consistindo em uma infinidade de contratos de opção e uma posição no estoque subjacente. The market maker's job at this point is to continue to trade for theoretical edge while maintaining a hedged position to alleviate risk. In the following section, we will review the basics of risk management in the form of hedging. Although market makers are the masters of hedging, hedged positions are essential for the risk management for all option traders. It will be equally important for you to understand how to use these strategies.
THE TRUMP CARD OF MARKET OPERATORS: HEDGING.
Thus far, we have overviewed the logistics of the market maker's business model and have seen how it functions to both serve the trading public and the market maker simultaneously. Now we will consider how market makers work to secure their edge against the ongoing risks presented to their many positions.
An investor who chooses to invest in a particular market is exposed to the risks that are inherent in that market. The specific risk is high if the investor concentrates on one security only. The more a portfolio is diversified, the lesser the specific risk. Hedging is the most basic strategy that an investor can use in order to guard against loss. A hedge position is taken with the specific intent of lowering risk. As we have learned, option positions are susceptible to more than just simple directional price risks, and therefore, a trader must be concerned with more than simple delta neutral trading. There is risk associated with each of the variables that determine an option's value (from interest rates to time until expiration).
In order to minimize the effect of these risks to an option's value, a trader will establish a position with offsetting characteristics. Just as you hedge a bet by betting against your original bet too a lesser degree, market makers try to take on complementary positions (in stock or options) with characteristics that can potentially buffer against exposure to loss. A hedge, then, is a position that is established for the sole purpose of protecting an existing position.
Determining what risks an option position might be exposed to is one of the first steps towards determining how best to hedge risk. We have learned that six risks are associated with an option position:
Directional risk (delta risk) is the risk that an option's value will change as the underlying asset changes in value. All other factors aside, as the price of an underlying asset decreases, the value of a call will decrease while the price of the put will increase. Conversely, as the underlying asset increases in value, a call will increases in value as the put decreases in value. Delta risk can easily be offset through the purchase or sale of an option or stock with opposing directional characteristics. Directional hedges are illustrated in Tables 1 and 2.
Table 1: Delta Effects.
When the Underlying Security .
Increase in Value.
Decrease in Value.
The Long Call will .
Increase in Value.
Decrease in Value.
The Short Call will .
Decrease in Value.
Increase in Value.
The Long Put will .
Decrease in Value.
Increase in Value.
The Short Put will .
Increase in Value.
Decrease in Value.
Table 2: Position hedges.
Long Call Increases in value as the underlying increases in value.
Short Call Decreases in value as the underlying increases in value.
Long Put Decreases in value as the underlying increases in value.
Short Put Increases in value as the underlying decreases in value.
Gamma risk is the risk that the delta of an option will change. The holder of options is long gamma (backspreader) and the seller of options is short gamma (frontspreader). Sometimes referred to as curvature, gamma can be offset through the purchase or sale of options with opposing gammas.
Volatility risk (vega risk) is the risk that the volatility assumption used in pricing the options will change. If the option volatility rises, the value of the calls and puts will increase. The holder of any options might benefit from an increase in volatility whereas the seller might incur a loss. This risk can be offset through the purchase or sale of option contracts that have an opposing vega value. For example, we know that options decrease in value as volatility decreases. Therefore, selling options (that benefit as volatility decreases) might be the best hedge for a trader who is looking to offset vega risk.
Time decay (theta risk) is a positions exposure to the effects of a change in the amount of time remaining to expiration. We know that time moves forward and as it does, the time value of an option decreases. This exposure can be offset through the purchase or sale of options with opposite theta characteristics. The effects of time decay on an options value are illustrated below.
Effects of Theta.
As Time Moves Forward.
Value remains constant.
Decrease in Value.
Increase in Value.
Decrease in Value.
Increase in Value.
Interest rate risk (rho risk) is negligible to most traders. Its impact can be substantial if a position contains a large amount of long or short stock or long-term options. Decreasing the stock position, replacing stock with options is the most efficient way to reduce rho risk. Remember, longer-term options are more interest rate sensitive.
Dividend risk can be offset through the purchase or sale of options or the underlying stock. An increase in the dividend will make the call decrease in value because the holder of the call does not receive the dividend. In this situation, it is more advantageous to own the underlying asset over owning the call. Conversely, the put will increase in value when the dividend is increased because the short stock seller must pay the dividend to the lender of the stock, which makes owning the put more desirable than shorting the underlying asset.
Table 4 illustrates the effects of changing input variables on an option's theoretical value.
Varying market conditions.
As market conditions change the values of.
Rise in price of the underlying.
Interest rates Rise.
Knowing the risks involved with options trading is the first step to successful trading while hedging these risks to create a profitable position is the second step. We have learned that there are different ways to hedge each trade, providing a market maker with the important task of determining the best hedge possible for each trade he or she executes. Determining which hedge is the best is based on knowing not only the risks of the original trade but also the corresponding risk of the hedge. Observing actual positions under a multitude of conditions is by far the best way to learn the complex nuances of options. The next two chapters will guide the reader through the fundamentals of the marketplace and setting up a trading station, giving the investor the ability to begin trading on his or her own.
HOW TO SELECT AN OPTIONS BROKER.
Once you've made the decision to trade online, it's important to identify a brokerage firm that will meet, and preferably exceed, your expectations. This is especially true in the options trading arena because there are potentially many more factors involved than in a straightforward stock transaction. With stocks, once you have determined what stock to trade, it really becomes a question of how much to buy or sell and when. With options, the decision is much more complicated because the following factors must be considered: Will you buy (or sell) calls or puts? What strike price(s)? What month(s)? What is your strategy?
Given this level of complexity, there are a few important issues to consider before you choose an on-line broker:
Whether an online broker provides real time option quotes is, perhaps, the most important consideration for even semi-serious option traders. On-line brokerage firms, especially those that specialize in stocks, are sometimes lacking in this critical area. While they might be able to provide real time quotes on individual options, the option chains (the charts showing the bid-ask, volume, and other critical information for all strike prices and expirations) are often not accurate.
With the efficiency of the exchanges and the standardization of the contracts, there is no longer a reason for option traders to pay higher commissions on option trades vs. stock trades; it's no more difficult to execute an options trade than it is to execute a stock trade.
Access to Analytics.
Advanced analytical tools like implied volatilities and deltas are important to serious option traders. However, most traditional brokers do not provide customers access to this nformation. Instead, their customers are forced to trade in the dark.
Choosing an exchange (i. e., BSE or NSE)
When options are traded on multiple exchanges, it's often possible to get a slightly better price on one of the exchanges. While these discrepancies don't last very long, 0.50 or 0.25 can make a significant difference on a large block of trade. However, brokerage firms that make it difficult to execute basic spread orders are even less likely to offer customers a choice as to where their trades are executed. In fact, many customers probably aren't even aware of potential price discrepancies across exchanges. For investors who make larger trades, this can be a significant issue.
Before establishing any position it's important to establish a few guidelines for yourself: Are you trading with money you can afford to lose? Is the position you intend to put on sufficiently small that it won't have a major impact on your portfolio? What is your specific objective for this position? Qual é a sua estratégia de saída? What is your downside risk? Are you trading with money you can afford to lose?
The importance of this cannot be overstressed. If you have already earmarked the money for another use, it is not advisable to invest it in a risky position--even for a short term trade. Every day the market extracts money from people who can't afford to lose it. Don't be one of them.
Is the position you intend to put on sufficiently small that it won't have a major impact on your portfolio?
This is a guideline novice traders routinely violate. Experienced traders caution people against putting on positions that will have devastating results if the market moves the wrong way. Some traders go so far as to say that positions should be so small that putting them on seems almost meaningless. Typically, the percentage of your portfolio associated with this would be 1/2% to 1%. Keep in mind though that this applies to traders more than long-term investors. This is not to say that investors wouldn't benefit from the same advice. They probably would. It's just that a disciplined approach is particularly beneficial to option traders who could easily lose their entire investment.
What is your specific objective for this position? Qual é a sua estratégia de saída?
These issues are inter-related so we will examine them together.
First, whenever you put on a position, it's important to set a price target along with a strategy for what happens when you get there. For example, if you are convinced a particular Internet stock is hugely overvalued (imagine that!) and due for a correction, you might decide to buy a long put either at-the-money or slightly out-of-the-money. If the market behaves as you predict and the price drops, you have to decide how far to let your profits run and at what point to take profits.
If the stock drops 50% and your put is now deep in-the-money, this might be a good time to take profits. On the other hand, if you think the stock is still overvalued, you could buy a slightly out of the money call and let the put ride. For example, if the stock dropped from 250 to 150 and you own the 240 put, you could lock in your profit by buying a 150 call. This way, if the stock goes back up, what you lose in the put will be made up by the call. If the stock continues to drop as you hope, the put will increase in value and the call will expire worthless. Whatever you decide, it's good to have your strategy thought out in advance. This helps to take the emotion out of it.
What is your downside risk?
With option spreads and other advanced strategies, your maximum loss may be more than your initial investment. Before entering into any trade, it's important to know your maximum profit, maximum loss, and break-even. Trading surprises are seldom pleasant.
Modifying and Managing a Position Depending on market conditions, option investors may need to modify their positions either to lock in profits or protect themselves from adverse moves.
Protecting your profits and limiting your losses.
Taking the easiest example, let's imagine you bought a long call and watched with interest as the stock rallied. How can you protect what is now a paper profit? Considering the additional stock commissions involved in exercising the option, we'll disregard this as a strategy and focus on other alternatives. The dilemma whenever a position makes money is when to take profits and when to let profits ride. By selling the call, you lock in profits, but you may miss additional upside. On the other hand, if you sit tight, the stock could pull back below the strike price. In this case, you would lose your additional investment as well as your paper profit. Fortunately, there are other alternatives.
The important point to note is that the riskiest course of action is to do nothing because your initial investment remains at risk along with any paper profits you have generated.
SEVEN MYTHS ABOUT STOCK OPTIONS.
For years, the options market was shrouded in mystery as transactions took place with obscure options dealers who set the prices and terms of options contracts known as Jhota Phatak. The BSE and NSE created "listed options" that became the standard, and option prices were set in an auction market nearly identical to the stock exchanges. For the first time, this allowed the option holder to choose to sell his contract on the open market before it expired.
Trading volume in listed options has exploded in the United States and option trading on more than 1,900 different equities and indices now accounts for the equivalent of 70 million shares of stock trading each day. But many of the myths associated with options have lingered. Unfortunately, these myths have caused many investors to remain on the sidelines while they could be utilizing options profitably or for reducing risk.
90% of Options Expire Worthless.
This "statistic" is often bandied about by those who have no experience trading options. According to the CBOE, about 30% of all options expired worthless -- a far cry from 90%.
Options are Much Riskier Than Stocks or Mutual Funds.
This assumes that the investor is trading options with the same amount of capital that he would devote to stocks or mutual funds. On a "rupee for rupee" basis, options are riskier. Here at STOCKWHIZO Research, we never recommend trading options in this manner. Instead we show our subscribers that options are a cheap way to reduce their overall risk. Como? First, by limiting their total rupee exposure to a fraction of what they would invest in stocks or mutual funds. Second, by diversifying their options portfolio among different underlying equities. And third, by purchasing both call and put options, since put options are profitable when the underlying stock declines in prices.
Option Sellers Make Profits at the Expense of Option Buyers.
Unlike the gambling casino (or the lottery or the race track) which has built-in percentage advantages for the "house," option trading is a "zero sum game" in which option sellers and buyers are always at a standoff in total. Option buying and selling differ only in the distribution of their outcomes, not in their relative profitability. Although option buyers can have more losing than winning trades, they never lose more than their original investment and their profit potential is unlimited. Option sellers profit most of the time but their potential losses are unlimited. STOCKWHIZO has always been dedicated to maximizing profit potential through option buying -- by taking full advantage of the unlimited profit potential and limited risk of this strategy.
Options are Too Complicated.
Nonsense! Anyone who is familiar with stocks can easily learn how to trade options. The approach to option trading that we use at STOCKWHIZO is very simple. If we are bullish on a stock, we advise you to buy a call option on that stock. For a fraction of the underlying stock price, you "rent" any appreciation in the stock above a particular price for a specified time. If we are bearish on a stock, we advise you to buy a put option. Here you "rent" any decline in the underlying stock below a particular price for a specified time. It's that simple!
Stockbrokers Don't Understand Options and are not interested in Options Business.
While this may have been a problem in the beginning, the brokerage landscape will significantly changed for the better. A number of brokerage firms now specialize exclusively in options. Many large brokers will become "option trader friendly." As time passes by with experience. Some traditional full-service firms will developed expertise in options and the desire for options business. While we do not recommend any specific firm, STOCKWHIZO subscribers receive a list of firms that are interested in options business and have the expertise to meet the needs of option traders.
You can't Beat the "Option Pricing Model."
Since options are a "zero-sum game," and option prices are based upon a mathematical "option pricing model," some say it is impossible to profit from buying options in the long run. WE STRONGLY DISAGREE. First, prices for exchange-listed options are set in the marketplace by buyers and sellers, although the computerized pricing models do exert a strong influence. But more importantly, these models are based upon the mistaken assumption that all stock price movement is "random." Clearly, there are always certain stocks that are moving in well-defined price trends, as opposed to moving randomly. If you can identify those stocks whose price trends are likely to continue, you can beat the option pricing model! Much of our research has been devoted to developing indicators to determine stocks that will continue moving in such price trends, so our subscribers can profit from buying undervalued options on these stocks.
Options Trading Requires Too Much Time.
Amateurs are rarely successful trading options because they don't have the time, information, expertise or the discipline to compete in this fast-moving market. But STOCKWHIZO subscribers have a big edge over these amateurs. First, our staff of professionals here at STOCKWHIZO Research have the information and expertise to make you a successful options trader. And second, we give you the disciplined trading rules that help you make big money and also minimize your time commitment to your options trading! We tell you how much to pay, when, and at what price to sell. And you can often leave these instructions with your broker, so your options portfolio can appreciate on "automatic pilot!"
Anyone seriously interested in trading would do well to buy a copy of Jack Schwager's books Market Wizards The New Market Wizards. Through interviews and conversations with America's top traders, Jack extracts the wisdom that separates successful traders from those who, through their trading, simply add to the wealth of successful traders.
Keeping Your Trades Small.
One of the key factors mentioned by almost every good trader is discipline. Discipline, as you might imagine, takes a variety of forms. For beginning traders, one of the toughest challenges is to keep trades small. Believe it or not, more than a few top traders don't allow any one position to account for more than 1% of their total portfolio. Professionals attribute much of their success to managing risk in this way. Limiting Your Losses.
Another aspect of trading that involves discipline is limiting your losses. Here, there isn't a magic formula that works for everyone. Instead, you have to determine your own threshold for pain. Whatever you decide, stick to it. One of the biggest mistakes people make is to take a position with the intention that it be a short-term trade. Then, when the position goes against them, they make a seamless and unprofitable transition from trader to long-term investor. More than a few people have gone broke waiting for the trend to reverse so they could get out at break-even. If you are going to trade, you have to be willing to accept losses--and keep them limited!
Another mistake novice traders make is getting out of profitable positions too quickly. If the position is going well, it isn't healthy to worry about giving it all back. If that's a concern, you might want to liquidate part of the position or use options to lock in your profit. Then, let the rest of it ride.
It isn't uncommon for people to view trading as a fast-paced, exciting endeavor. Fast-paced? Absolutamente. Exciting? Now that's a matter of opinion.
The Importance of Remaining Cool-Tempered.
More than a few traders interviewed in The New Market Wizards emphasize the importance of remaining unemotional and cool-tempered. To these people, trading is a game of strategy that has nothing to do with emotion. Emotion, for these traders, would only cloud their judgment.
In the book Jack talks about one trader who was extremely emotional. Although Jack was able to show him how to be less emotional and more detached, it became quickly apparent didn't enjoy being emotionally unattached. He found it boring. Unfortunately, emotion involvement in trading comes at a high price. Before too long, that trader went broke. The morale of the story is simple: If you insist on being emotionally attached to your trading, be prepared to be physically detached from your money.
Acceptance and Responsibility.
One of the biggest mistakes traders can make is to agonize over mistakes. To beat yourself up for something you wish you hadn't done is truly counterproductive in the long run. Accept what happens, learn from it and move on. For the same reason, it's absolutely crucial to take responsibility for your trades and your mistakes. If you listen to someone else's advice, remember that you, and you alone, are responsible if you act on the advice.
Another Way to View Losses.
Perhaps the most striking example of emotional distance in trading is a reaction to positions that go against thinking to yourself, "Hmmm, look at that." If only we could all be that calm! Of all the emotions we could possibly experience, fear and greed are possibly the two most damaging.
Of all the emotions that can negatively impact your trading, fear may be the worst. According to many of the traders interviewed in The New Market Wizards, trading with scared money is an absolute recipe for disaster. If you live with the constant fear that the position will go against you, you are committing a cardinal sin of trading. Before long, fear will paralyze your every move. Trading opportunities will be lost and losses will mount. To help deal with your fear, keep in mind what fear is.
False Evidence Appearing Real.
The flip side of fear is confidence. This is a quality that all great traders have in abundance. Great traders don't worry about their positions or dwell on short-term losses because they know they will win over the long term. They don't just think they'll win. And they don't just believe they'll win. They KNOW they'll win. It should never bother to lose, because one should always believe that one would make it right back. That's what it takes.
For many traders, sharing opinions and taking a particular stance only magnifies the stress. As a result, they begin to fear being wrong as much as they fear losing money. Although it may be one of the hardest lessons to learn, the ability to change your opinion without changing your opinion of yourself is an especially valuable skill to acquire. If that's too hard to do, the alternative may prove much easier: Don't talk about your trades.
Greed is a particularly ugly word in trading because it is the root cause of more than a few problems. It's greed that often leads traders to take on positions that are too large or too risky. It's greed that causes people to watch once profitable positions get wiped out because they never locked in profits and instead watched the market take it all back.
Part of the remedy for greed is to have, and stick to, a trading plan. If you faithfully set and adjust stop points, you can automate your trading to take the emotion out of the game. For example, let's say you are long the 150 calls in a stock that rises more rapidly than you ever expected. With the stock at 240, the dilemma is fairly obvious. If you sell the calls, you lock in the profit but you eliminate any additional upside potential. Rather than sell the calls, you might buy an equal number of 230 puts. The Rs.90 profit per call that you just locked in will more than offset the cost of the puts. At the same time, you've left yourself open to additional upside profit.
Another strategy successful traders use is to gradually get in and out of positions. In other words, rather than putting on a large trade all at once, buy a few contracts and see how the position behaves. When it's time to get out, you can use the same strategy. Psychologically, the problem people have implementing this strategy is that it takes away the "right" and "wrong" of the decision making process. It's impossible to be completely right or completely wrong using this strategy because, by definition, some of the trades will be put on at a better price than others.
For professional traders especially, instincts often play a crucial role in trading. To truly appreciate this, just close your eyes and imagine making trades in a fast market with dozens if not hundreds of people screaming around you. In this environment, it becomes absolutely essential to maintain a high level of awareness about everything going on around you. Then, to have the confidence to pull the trigger when necessary, you have to trust your instincts. It's absolutely amazing to see how some professional traders, even in a busy market, know exactly who is making what trades. For these traders, expanded awareness is often a necessary prerequisite to fully developing and trusting their instincts.
The same is true for professional traders as well. Watching how markets behave and developing a feel for the price fluctuations is truly time well spent. Unfortunately, in this era of technology, people have become so removed from their natural instincts that many are no longer in touch with their intuition. This is unfortunate because intuition functions as a wonderful inner guidance system for those who know how to use it.
One trader interviewed by Jack Schwager in The New Market Wizards relies so heavily on his intuition that he didn't want his name in the book for fear his clients would be uncomfortable with his strategy and move their money elsewhere. Speaking anonymously, he described in detail how he establishes a rhythm and "gets in sync" with the markets. In this way, he has learned to distinguish between what he "wants to happen" and what he "knows will happen." In his opinion, the intuition knows what will happen. With this knowing, the ideal trade is effortless. If it doesn't feel right, he doesn't do it.
When he doesn't feel in sync with the markets, this trader will paper trade until he feels back in rhythm. But even here, he keeps his ego and emotion out of it. His definition of out of sync is completely quantifiable. Being wrong three times in a row is out of sync. Three mistakes and it's back to the paper trading. Now there's a strategy almost everyone can benefit from.
Trading is a performance-oriented discipline and every great athlete, trader, or Performer will occasionally hit performance blocks. Every Olympic contender trained hard physically, but the difference between the ones who made the Olympic team and those who did not was the emphasis put on mental coaching by the winners. Much of a trader's early education is concentrated on strategies and market analysis. But what are the necessary ingredients for peak performance? What are the tools for both mastering the mental side of the game and busting out of the inevitable slumps that can occur along the way?
First - what is the mindset necessary for peak performance? How does one ultimately get in the groove? There is no better feeling than being in the "flow" - especially with trading. That is what many of us live for and what keeps us in the game, because trading can be a very tough business with long hours. There are several key common ingredients when you are performing your best, no matter what the field.
EXPECT success. It begins initially with your self-talk. Do you get down on yourself when you make a mistake? - or do you say to yourself - next time I will do better because I have great trade management and am a superior trader! Be your own best motivator and believer in yourself. Positive Self Talk leads to positive BELIEFS. If you believe you can do something, you WILL eventually find a way. When you have a positive belief system that the eventual outcome will be OK, then you are more mentally and physically relaxed. You then have better concentration, which leads to smoother execution, which of course leads to peak performance.
Now, on the flip side of the coin, negative self-talk sows seeds of doubt. This lowers self-confidence, which leads to a negative belief system. This then creates anxiety, which leads to disrupted concentration. Now the trader becomes tense and tentative which in turn leads to poor performance. Talk about a vicious cycle!
SECRETS OF TOP TRADING PERFORMANCE.
KEY INGREDIENTS TO PERFORMING YOUR BEST.
You must be passionate about what you are doing and having fun. Passion first, then performance.
Top performance comes from having a high degree of confidence. You must have the confidence that you can take control and face adversity. You must also be confident that you will have a favorable outcome over time.
Peak performance comes from exceptional CONCENTRATION. You must concentrate on the process, though, not the outcome. A sprinter who is in the lead is thinking about the wind on their face, how relaxed their arms are, feeling the perfect stride they are totally in the moment. The person who does NOT have the edge is thinking, "Oh, that runner is pulling ahead of me I don't know if I have enough wind to catch the leader " They are tense and tight because they are thinking about the outcome, not the process.
Great performances come from being able to rebound quickly and forget about mistakes.
Great performance comes from pushing yourself and trying to overcome limitations. Staying in the safe zone becomes a monkey on your back. Challenge yourself to take that hard trade. Manage it. If it does not work out, so what your risk was limited and you can pat yourself on the back for taking the hard trade in the first place.
Great performance comes from turning off the brain and becoming automatic. This is being in the Zone in the groove. You can't overanalyze the markets during the trading day.
When you are relaxed, your reflexes and timing are superior because you are loose.
There are some concrete tools to break the cycle and bust out of the slump? The number one tool for starters is POSITIVE SELF TALK. We all talk to ourselves in our own head. Be aware of the things you are saying to yourself. The written word is also a powerful tool. Read affirmations and books on positive thinking. Norman Vincent Peale, Napoleon Hill . Arnold Schwarzenagger's autobiography are a few. Richard Marcinko wrote a book called the Rogue Warrior. He talked about the Will to WIN and the belief that ANY circumstances could be overcome. This is a great inspirational book for traders. Next - act like you are already where you want to be. Assume the mannerisms, posture and talk of a top trader. In addition to self-talk and reading written words, develop mental pictures. Visualize what you are going to do with your wealth or how it is that you want to live. Think of the power that money would give you to start any organization you want or to make other people's lives better. Visualize your dream house. Program your subconscious as though you are already there. Dare to dream.
OK - talk, words and pictures what is next? Look at your environment that you have surrounded yourself with. Your success in trading will also be a product of your environment and I am not just talking about office space. Look at the people you surround yourself with. Do they support your activities? Surround yourself with people who believe in you, who smile, and who are enthusiastic in anything they try or do. The top Olympic athletes had friends and family cheering them on every step of the way.
BE PREPARED FOR A SURPRISE EVERYDAY!
All of the above factors deal with external factors and internal belief systems. Now let's get down to the DOING part! Every trader should be prepared before the markets open because they already did their homework - right?! One of the most impressive points in the Rogue Warrior book was this veteran navy seal's obsession for being totally prepared for Mr. Murphy! There was always a backup plan for everything and this is what kept him alive. Prepare your daily game plan by looking for both new setups and preparing strategies for managing existing positions.
So, assuming that you have done your daily homework as a trader, the next step is to learn how to get into the groove. There is no better tool for this than having routines and rituals. Pre-market rituals help calm the nerves, get you into a rhythm, and also help to turn off the logical part of your brain - the part that wants to overanalyze everything. If you have a chattering monkey sitting behind your ear, routines and rituals are one of the best things to shut that monkey up. Maybe there is an opening sequence of tasks you do before the market opens. Perhaps in the middle of the day you draw swing charts or take periodic readings of the market's action. Maybe you keep a journal and make notes to yourself. At the end of the day, what type of record keeping do you do for your trading activity? What do you do to unwind? Salesmen are taught to do small rituals before cold calling clients. It controls the anxieties and fears of rejection. Cricket opening Batsmen have a pre-warm up ritual. It calms their minds and puts their body on the autopilot mode. It keeps them involved in the PROCESS and not thinking about the outcome. One of the more common rituals on the trading floors was to wear the same disgusting lucky tie every day. If the mind BELIEVED that the tie was lucky, this was all the traders needed to keep the long term odds in their favor.
Here is another helpful factor: A healthy body keeps a healthy mind. EXERCISE! This gets oxygen to the brain and keeps the blood flowing. How can you expect to be a peak performer when you are eating junk food and going through insulin swings? Or perhaps you drank too much wine the night before or are jittery from drinking too much coffee. How can you concentrate well if you are not getting a full decent night's sleep? Sure, most of these are minor factors but they can all add up to major bumps in your performance. One moment of sloppiness can lead to forgetting to place stops or letting a bad trade go too long. Then when damage is done, your confidence gets chipped away. You must treat your confidence level as something to be protected. Good habits will keep your confidence level high. Once you have good habits, it will allow you to increase your trading size.
If you want to push yourself to the next level in your trading and are wondering how to increase your size, you MUST have a foundation of good habits. If you are running into a mental block in this area, it is your subconscious's way of telling you that either you have not done adequate preparation or you are not satisfied with your money management habits.
There is one more extremely important thing that contributes to your success and that is GOAL SETTING. When you set your goals, they must be concrete and measurable. You must also break them down into bite size pieces. Perhaps your larger goal is to make 8 digits over the next three years, but how do you get there? Put together a more detailed business plan that is NOT Rupee oriented but will help you eventually reach your Rupee-oriented goal. Maybe it includes how many trades you should make per week, how much time you should devote each evening to preparation and studying charts, and plans for controlling risk. Both short term and long term goals help achieve peak performance.
You must also have concrete ways to measure those goals. Top cricketers know the splits that they run. They know if they are ON or OFF according to how practice goes. They know their unforced error percentage, their personal best, and their competition's stats. The same should apply to you in your trading. Know your weekly win/loss ratios, your trade frequency, and the average amount of profit or loss each month. Only by having something to measure can you tell if you are improving or not and moving closer to your goal!
The battleground isn't the markets but what's within you. The more you talk with other traders, the more you realize that everyone goes through various common experiences. Everyone makes many of the same classic mistakes. But what distinguishes the ones who can ultimately overcome them?
Remember that ATTITUDE is everything. How you frame out an individual experience or event will affect your success in the long run. Do you see a trading loss or bad drawdown period as a major setback, or do you see it as a learning experience from which you can figure out how to be on the RIGHT side of a trade instead of the wrong side the next time around. Many great traders use periods after drawdowns to go back to the drawing board. Some of the best systems and trading ideas have come after periods of adversity. What incentive is there to learn and improve ourselves when everything is smooth sailing and we are fat and happy? But when times are tough, that is when we can rise to the occasion and prove that we can overcome any obstacle set down in our path. So many great athletes have been able to come from behind when they are down because they have learned how to seize that one opening or opportunity and CONVERT. They latch on to the tiniest shift in momentum and milk it for all it is worth. Latch on to that next winning trade and convert. The first small moral victory is the first step towards reaching the top of Mt. Everest. And if you keep making small steady steps, you will eventually reach the top. Sometimes for a trader, the greatest feeling in the world can be making back those losses, no matter how long it takes, because once you have done that, you realize you can do anything.
The most successful players are the ones who have a burning desire to win.
Don't check out of the game. Never give up!
Improve your consistency. Stay active, stay involved, and keep your feet moving.
Seja paciente. Do not force a trade that isn't there. Wait for the play to set up.
When you get a good trade, go for it. Manage it. Trail a stop. Don't be too eager to get out.
Be flexible - if what you are doing isn't working, change what you are doing!
When down, get a little rhythm and confidence going. Don't worry about being too ambitious.
Stay with your game. Don't let outside distractions bother you. They take energy and break your concentration.
Match your particular strengths to the type of market conditions.
Hate making stupid mistakes and unforced errors. This includes not getting out of a bad trade when you know you are wrong.
Many players will play their best game when they are coming from behind.
Copyright 2001 by Hiten Jhaveri, StockWhizo Investments. Todos os direitos reservados no mundo inteiro.

Learn How To Trade Options For Monthly Income.
Do You Know You Can Make Money Trading Options Without Leaving Your Job?
In short: You will get 5 Option & Future strategies and a bonus strategy of 38% a month (your results may differ), plus my support for next six months. If you have any doubts even while live trading you can ask me. You also get a Basic Option Course to know about Option Greeks. If you want, I will make the first trade for you. Fees details here.
How many times have you traded options and futures and lost money? If you are trading on hope you are losing money. If you are trading direction you are surly losing money. Because when you cannot predict your own future how can you predict the direction of a stock? What if you learn a trade where predicting direction of a stock is NOT required? Yes money can be make trading options and futures even without knowing or predicting the direction. It is called NON-Directional Trading. On top of that there is a way to buy insurance for a trade to keep your capital protected.
Before reading further just see one testimonial from one of my client who did the course. See his one month profit – Rs.4.05 Lakhs – Your results may vary.
Testimonial by Ravindra from Pune – 10.65% Profit Intraday Rs.4.05 Lakhs in Directional Strategy of My Course – Os resultados podem variar para usuários.
Rs.16.26 Lakh profit on Rs.38 Lakh margin blocked. 42.78% return in 5 trading days – Os resultados podem variar para usuários.
One Time Fees For The Conservative Options & Futures Course & Support on Email for Six Months is Rs. 5000/- Only.
Once you enroll for the course you will get all the 5 strategies and a bonus strategy of 38% a month made by one of my client in your email within 24 hours of your payment. Your results may differ. You will get my personal support on Email only till you are successful trading my strategies. You will get support to understand the strategies for SIX (6) months. You will get IMPORTANT emails with ideas to trade my strategies and other ideas on trading till you are successful trading my strategies. I will continue support up to 6 months from the date of enrollment. With the help of my support emails you will get many ideas to trade on Nifty as well as on stocks. These emails DO NOT go to free subscribers. One time fees only for course and support for 6 months is FREE. You Do Not Have to pay anything more.
One Time Fees For The Conservative Options & Futures Course & FREE Support on Phone, WhatsApp and Email for Six Months is Rs.6000/- Only.
Once you enroll for the course you will get all the 5 strategies and a bonus strategy of 38% a month made by one of my client in your email within 24 hours of your payment. Your results may differ. You will get my personal support on Phone + WhatsApp + Email till you are successful trading my strategies. You will get support to understand the strategies for SIX (6) months. You will get IMPORTANT emails with ideas to trade my strategies and other ideas on trading till you are successful trading my strategies. I will continue support up to 6 months from the date of enrollment. With the help of my support emails you will get many ideas to trade on Nifty as well as on stocks. These emails DO NOT go to free subscribers. One time fees only for course and support for 6 months is FREE. You Do Not Have to pay anything more.
Course Explained:
Total 5 strategies: You get two conservative non-directional option trading strategies which are profitable 80% of the times. You also get two directional conservative strategies to trade when markets are moving fast due to news. You NEED NOT be correct in predicting the direction. The trade makes money in BOTH directions. You also get one great stock option strategy.
Losses are limited, small and manageable. These strategies can make good money every month. To know exactly how much you can make please contact me.
Strategy 1) Very conservative: Non-Directional Nifty Options. You have to trade this every month. This trade benefits from time decay of both Calls and Puts. As you know Nifty is mostly range-bound, so you win. When it trends a lot then we take a stop-loss of just 1% because of the hedge and we go to Strategy 2 to recover our money. The hedge will save you from a big loss. Most of the times this trade will be in profit.
Strategy 2) Conservative: To be played only when stop-loss is hit in Strategy 1. I have developed a plan to ensure that even if you take a stop loss in Strategy 1 – the Strategy 2 will give you back that money plus some more in profits. Por quê? Because for Nifty has to travel 1000 points one direction in 40-60 days, which is near impossible. Which means combine Strategy 1 and 2 – there will be rarely a loss. Success rate of this strategy is 90%. We will double the number of lots here so that losses are recovered and you make a small profit.
IMP NOTE: Strategy 1 and Strategy 2 combined you will rarely see a loss month in years. The above two strategies itself is worth the course fee. If you are losing money its highly recommended that you do this course. Rest of the strategies can make more but are slightly aggressive.
Strategy 3) Aggressive: Stock Options. Only when a stock gives us an excellent opportunity to trade. I will tell you how to know that. It makes good money if stop loss in NOT hit. When you call me I will tell you how much you can make. If stop loss is hit it is even better as the money goes into triple leverage – it makes money from three places. If stop loss is hit, there is a proper way to recover loss plus make the same profit if the trade did not hit stop loss. Until recovery you keep getting some money as monthly income. Since the recovery and profits is almost certain, I call it the no loss strategy. You will need some cash if stop loss is hit. This is a great trade for traders who have lot of stocks in their Demat account.
Strategy 4 and Strategy 5 are the Directional Aggressive Strategies where Futures is hedged with Options. If correct Futures makes money if wrong Options make money. Here if you are badly wrong in Futures you can make very good profits. If correct you still make money.
When you know that losses are less and profits more, you can be fearless in compounding your money over the years to make good money .
Note: When there is volatility you should take small risks to increase returns from your account. To help you make more money I will also tell you 2 conservative directional strategies that involves Future trading with options hedging. These strategies make more if you are right, but lose less if you are wrong. If you are horribly wrong, you will make a lot of money. 🙂 One of my clients made 38% return* in one month in this strategy even when he was wrong. You will know his trade as well. *Results may vary for users.
Another benefit of this directional strategy is that as the position is properly hedged you need not take a stop-loss. Like I said, you can decide when to take the profits. This trade makes money both sides, so you can just wait for the right time to take your profits out. You lose money only if Nifty movement is very slow for a full 30 days. How many times does that happen?
After the trading course I will give support for a few months from the date of order of course. How many people give this kind of service?
Why I Started This Website & Course?
I see that lot of traders are fooled by tips providers / advisory services – me too – I lost 7 lakhs trading their tips and speculative trades myself from 2007-2018. Well no more, because I took to learning stock trading myself seriously and today am happy I lost that money because it was that failure that made me the person I am today.
Are you interested in getting a 5 day free course to learn trading options properly? If yes, submit your email in the form below. The course will start from tomorrow for next 5 days, delivered directly to you email. Read at your own leisure.
11 Reasons Why You Should Do This Course:
1. Technical Analysis Knowledge NOT required – Read to know why I do not believe in Technical Analysis. But it good for Back Testing. See one of my client did back testing on my strategies and he found it working well in all market conditions.
3. Regular Monitoring NOT Required – Stock trading is not watching stocks.
4. Continue with Your Job – Yes just because you are trading does not mean you have to leave your job.
5. Do Course From Your Home – Why go anywhere when due to Internet we can still be connected?
6. 100% Hedged – This is PURE INSURANCE Trading.
7. Stress-Free Trading – Making money should not come with stress.
8. Scaling Possible – As you age you will have more money, and if you are a good trader it is always better to trade with more money.
9. One Time Fee – Its a course not tips that you have to pay every-month and lose.
Testimonial by a Technical Analyst an Expert Trader – Results may vary for users:
60% Profit Using Just Strategy 1 In A Financial Year – Results may vary for users:
He is owner of a very popular trading software company:
Testimonial by Housewife Trader – Results may vary for users:
How The Course Is Conducted?
This is the first question traders ask me when they call me. I do not call anyone, traders interested in the course call me. And this is the first question they ask. Here is how the course is conducted:
Step 1. You will read below that you will get 5 conservative option and future strategies and one bonus trade done by my client to get more returns than I ever thought was possible once you enroll for the course. Details on the strategies is written below.
Step 2. If you feel like doing the course you pay the course fee. Click here to know the course fee – it will open in a new window. Please read, it is not high at all, in fact it is less than your one loss.
Step 3. Once the fee is paid you inform me by contacting me here or on whatsapp on my number 9051143004. Please tell me your name, email, and payment details.
Step 4. Within 24 hours of the payment I will send you the strategies in your email. I have myself written these strategies in 4 PDF files which I will send as an attachment to your email.
Step 5. You can read these strategies whenever you want when free. Please read twice before asking me questions.
Step 6. Though it is written in a easy to understand language, it is obvious you may have doubts. After reading twice please ask me questions and clear your doubts. No one in India gives that much time as a service to educate proper hedging strategies to help you become a better trader, for a one time fee. Most of them ask upwards of Rs.30,000 or a monthly fee. Here you just have to pay only once.
Step 7. If you paid only for email support you can ask questions via email. If you paid for all three support you can clear your doubts via email, whatsapp and phone. If the questions are long please email as you will have the backup, if short please whatsapp, if instant please call.
Step 8. Support will be till the time written in the fee details page.
Step 9. From next day onward you will start getting emails to help you know what strategy to trade and what may happen to the stock markets. These emails are not sent to free email subscribers. These emails are not advisory service or tip providing service, they are given to help you become a better trader and trade the correct strategy.
One Time Fees For The Conservative Options & Futures Course & Support on Email for Six Months is Rs. 5000/- Only.
Once you enroll for the course you will get all the 5 strategies and a bonus strategy of 38% a month made by one of my client in your email within 24 hours of your payment. Your results may differ. You will get my personal support on Email only till you are successful trading my strategies. You will get support to understand the strategies for SIX (6) months. You will get IMPORTANT emails with ideas to trade my strategies and other ideas on trading till you are successful trading my strategies. I will continue support up to 6 months from the date of enrollment. With the help of my support emails you will get many ideas to trade on Nifty as well as on stocks. These emails DO NOT go to free subscribers. One time fees only for course and support for 6 months is FREE. You Do Not Have to pay anything more.
One Time Fees For The Conservative Options & Futures Course & Support on Phone, WhatsApp and Email for Six Months is Rs.6000/- Only.
Once you enroll for the course you will get all the 5 strategies and a bonus strategy of 38% a month made by one of my client in your email within 24 hours of your payment. Your results may differ. You will get my personal support on Phone + WhatsApp + Email till you are successful trading my strategies. You will get support to understand the strategies for SIX (6) months. You will get IMPORTANT emails with ideas to trade my strategies and other ideas on trading till you are successful trading my strategies. I will continue support up to 6 months from the date of enrollment. With the help of my support emails you will get many ideas to trade on Nifty as well as on stocks. These emails DO NOT go to free subscribers. One time fees only for course and support for 6 months is FREE. You Do Not Have to pay anything more.
How Much Can You Make If you Do My Options and Futures Course?
You see not all traders are same. So some will get exceptional returns and some average. Like This – Ravi Excellent Trader Makes Rs. 16.26 Lakhs Profit in 5 Days – Os resultados podem variar para usuários. See the proof of 5 days trading profits made by him:
Rs. 16.26 Lakhs profits on Rs. 38 Lakhs margin blocked. 42.78% return in 5 trading days – Os resultados podem variar para usuários.
First Trade according to my strategy with amazing profits:
Testimonial by Ravindra – 10.65% Profit Intraday Rs.4.05 Lakhs in Directional Strategy of My Course – Os resultados podem variar para usuários.
Click here to see his profits day by day. Please remember that results are typical and may vary from trade to trade. Such amazing profits are not possible in every trade. The trader has written on how he achieved such amazing results. Click here to read his white paper.
Very Imp Disclaimer: These results like 10.65% profit are typical and its not guaranteed that every trade will produce the same or similar results. However the hedging methods in the course will help you to take such aggressive trades even with a lot of cash, because you know that capital protection is there no matter what. Smart traders will always make more.
Want to see more testimonials? I would request you to read testimonials and reviews of the course by real traders here – and see how they are making good profits. (Results may vary for users.)
Another trader who is not a full time trader with amazing returns:
Testimonial by Mr. Inder – Os resultados podem variar para usuários.
If you subscribe for this course, you will get his trade details and know how he made such a good return in such a short time.
NOTE: Mr. Inder’s trade will be given as bonus to all paid subscribers of the course the same day along with all other strategies. Both Ravi and Mr. Inder are still doing good with the directional but hedged strategies written in my course. As Mr. Inder has no issues sharing his trade this is given as a bonus to all paid subscribers to improve their returns. His idea needs a little bit of practice, then you can improve your returns from trading this strategy. It may take some time but with efforts results will show.
NOTE: Mr. Inder traded the conservative directional strategy in the course. 11% return in 1 trade is typical and may not happen in every trade. Testimonial was sent without asking as a comment. Mr. Inder made a total profit of 37.8% on margin blocked. He made MORE when he was WRONG in his Future trade. If you take the course I will send his real trades for your learning and proof. Not every trade can bring such results. Your results may differ.
Before reading further please understand, and I hope you will agree with me that, education helps for life not one or two days . By getting tips you not only lose money but also time. In the end you learn nothing and get frustrated. Therefore education is more important than tips . How many people who have taken tips have become very rich trading stock markets by taking tips? NONE . But people like Warent Buffet (the BEST stock trader the world has ever produced), are highly educated and never take tips. These people invest money only in knowledge to become better traders. You went to school for education, therefore you got a good job. Imagine the return on investment education gives. Today your six month’s salary is much more than your entire fee of school and college. This is the return on investment knowledge can give .
I have been trading options successfully since 2018. Before that I was losing money trading the stock markets, because I lacked knowledge of trading. From 2007 to 2018 I lost more than Rs.7 lakhs which was 100% of my savings. I did a lot of mistakes while trading. You can read my mistakes here and know the common trading mistakes traders do. You can read some option strategies written by me here. All are written with real option premium provided by NSE at the time of writing. I also try to help my email subscribers trade well through my free newsletters for life which you can sign up here:
I offer an Options and Futures trading course to help you trade profitably: You Learn How To Trade Non-Directional Option Strategies “Conservatively” For Monthly Income with Peace of Mind!
Here Are Some Benefits Of My Course, There Are More Actually But You Will Know Only After You Do It.
No need to go anywhere, you can do this course from your home Technical Analysis (TA) knowledge is NOT required NO Software Required Strike Selection will be Taught NO need to monitor your trades every second or minute or even for hours, so, You can continue with your job/business while the trades make money for you in the background, Last 2 years back-testing done strategies work in MOST market conditions, You need Rs. 75,000/- only to start trading my strategies, but the more the better to get the benefit of compounding, Pay once, learn and trade yourself profitably for life, so, NO need to depend on so called “Tips Providers” and lose money trading their tips (I have lost too) I will support you personally to understand the strategies well on email, phone and whatsapp. No one in the World does that for such a low price. I want you to become a better trader after the course that’s my aim and I will work hard to make sure it happens. For more information Email me, or Call/WhatsApp me on: 9051143004.
Important Features – These are some of the most common questions asked by traders.
Q 1. What is the accuracy of your strategies?
Ans & # 8211; You see this is stock trading. Risk is there but because the strategies are properly hedged, risk is reduced considerably. Accuracy is 75-80%. Risk is low because its hedged and planned disciplined trading, therefore it gets reduced to 2% on margin blocked.
Q 2. How much draw-down can come in my trading account if I trade the strategies?
Ans & # 8211; As written earlier: 2%-3% max.
Q 3. Is it for intraday or positional trading? If positional what happens in gap up or gap down next day?
Ans & # 8211; Its not intraday, its positional. The strategies are properly hedged, so basically you become a broker. You lose in one hand and gain in another hand. It is only the difference that you pay. Sleep well in the night, do not worry. Proper hedging will take care of your hard earned money. That is why even in huge gap up or gap down, you will lose maximum of 2-3% on margin blocked.
Q 4. Does your strategy provide clear entry, exit, stop loss and risk management?
Ans & # 8211; Sim. In fact you are paying exactly for this. Strike selection (here is where most traders go wrong in options trading), Buy or Sell which strike, Call or Put, When to Enter & When to Exit with Profits, Where exactly to take a Stop Loss, What to do after taking a Stop Loss to Get Your Money Back (Strategy 2), How to Hedge Options with Options, How to Hedge Futures with Options, etc. A lot of things are there in the course to learn. The aim of the course is to make you a good trader for life, not just one or two days.
Q 5. Can I make Option Trading as Full Time Business? If yes then how much capital I need to invest?
Ans & # 8211; You see stock trading is a business like any other business. Even when you open a shop at least Rs.50 lakh is required. 3-5% per month is what you make on blocked margin. It depends on how much you want to make per month to earn a living. Now this is simple interest mathematics. That said some traders, as you have seen above, like Ravi and Inder are doing much better. In fact these kinds of students are doing better than me and make me proud. If you can also enter that league, it will be great, and you will also make me proud.
Q 6. How much return can I expect consistently if I follow your strategy with all rules?
Ans & # 8211; Over one year period, anywhere from 30% to 40% Compound Annual Growth Rate (CAGR). Please note that your results may vary depending on after doing my course, how good a trader you become.
Q 7. Is it true that some signal providers from some states have inside information? Therefore normal retail traders like us find it difficult to make money trading?
Ans & # 8211; I do not know, neither am interested to know who has inside information or not. All I know is that if you have a proper planning and correct method and knowledge to trade, no one can stop you to make money trading.
Q 8. Maximum how much I can invest if I want to trade in nifty options?
Ans & # 8211; Maximum investment is your choice but to trade my strategies at least 75k is required.
Q 9. Can I trade anywhere or only in Nifty Options using your strategies? Because I want to trade Bank Nifty Weekly Options and Stock Options too?
Ans & # 8211; You see the logic of the trade is important. Once you learn the correct method to trade you can trade anywhere whether it is Bank Nifty Weekly Options, Bank Nifty Monthly Options, or Stock Options.
Conservative Hedged Options and Futures Course – Who Can Do This Course?
You can do the course if you just know the Basics of Options and Futures , like what margin is blocked when we buy an option and how much is blocked when we sell an option. What is difference between buying and selling options, and what is Futures trading. This info is enough to do the course. No high technical knowledge required to do the course. Strike selection, when to enter and exit, all is well written in very easy to understand language in the course. Even if you do not know, just email me after enrolling for the course and I will send you two great basic options links for more knowledge and better trading.
If you do not know Basics of Options do not worry I will help you know basics of options for free. To get the basics of options please fill the form below I am willing to help you for free:
Subscribe to My FREE Newsletter to Get 5 Day Free Course on Option and a Basic Option Course for FREE:
Testimonial by Aditi A Housewife – Os resultados podem variar para usuários.
WhatsApp Testimonial by Menon – Os resultados podem variar para usuários.
Find 100+ testimonials in these pages:
One Time Fees For The Conservative Options & Futures Course & Support on Email for Six Months is Rs. 5000/- Only.
Once you enroll for the course you will get all the 5 strategies and a bonus strategy of 38% a month made by one of my client in your email within 24 hours of your payment. Your results may differ. You will get my personal support on Email only till you are successful trading my strategies. You will get support to understand the strategies for SIX (6) months. You will get IMPORTANT emails with ideas to trade my strategies and other ideas on trading till you are successful trading my strategies. I will continue support up to 6 months from the date of enrollment. With the help of my support emails you will get many ideas to trade on Nifty as well as on stocks. These emails DO NOT go to free subscribers. One time fees only for course and support for 6 months is FREE. You Do Not Have to pay anything more.
One Time Fees For The Conservative Options & Futures Course & Support on Phone, WhatsApp and Email for Six Months is Rs.6000/- Only.
Once you enroll for the course you will get all the 5 strategies and a bonus strategy of 38% a month made by one of my client in your email within 24 hours of your payment. Your results may differ. You will get my personal support on Phone + WhatsApp + Email till you are successful trading my strategies. You will get support to understand the strategies for SIX (6) months. You will get IMPORTANT emails with ideas to trade my strategies and other ideas on trading till you are successful trading my strategies. I will continue support up to 6 months from the date of enrollment. With the help of my support emails you will get many ideas to trade on Nifty as well as on stocks. These emails DO NOT go to free subscribers. One time fees only for course and support for 6 months is FREE. You Do Not Have to pay anything more.
What You Get In the Course?
Antes de ler, entenda isso para todas as 5 estratégias, a seleção da greve será ensinada. A seleção de greve enquanto a opção de negociação é a parte mais essencial para o sucesso.
You get 5 option strategies: 2 conservative non-directional, 1 conservative stock option and 2 aggressive directional trades – and support from me to help you understand and trade the strategies well. I can give support because I believe in my strategies. The course has trades for all type of traders: non-directional are for people who are in a job or busy, stock option is for people who love to trade stocks and directional is for aggressive traders. Please read full to understand what you get and the risks and rewards involved in the strategies. ALL strategies have limited losses as they are 100% hedged and probability of success is more.
Stock Option Trade that is done once a month. It either makes a profit or hits stop loss on expiry day. If there is a profit there is nothing to be done. If there is a loss you will learn how to recover that loss and get into profits again. You also learn triple leverage i. e. money making money from three places.
Directional Conservative Trade is a combination of Future and options. Basically its a game of Delta. When right in Future, of course you make money. When wrong the Delta of options increases more than the Future – so you make money. It means you make money whether you are right or wrong. For example one of my clients made 37.8% return in April 2018 in the directional strategy. Please understand that results may vary for users.
You will learn how hedge options – so losses if any will be small and limited. If one option loses money, some other makes money. Overtime the non-directional trades win 80% of the times. So you should be in good profit at the end of the year. I also request you to Call/WhatsApp me: 9051143004 or email me to know more. Everyone’s situation is different. I can understand your situation only if you contact me.
WhatsApp Testimonial by Manish – Os resultados podem variar para usuários.
Why Should You Do This Course From Me?
Boa pergunta. When there are thousands out there selling their strategies why should you buy this course from me? I can understand your concern. I am myself a trader. I lost huge money trading – almost 7 lakhs at a time when I was going through financial difficulties. And to rub salt in the wound, I also lost my job. Once things got settled, I devoted my time on reading options. That made me a conservative trader. My profits are small, but at least I am making profits. Then to share my knowledge and to help traders make money, I opened this website. I am sure you must have read a few strategies written by me. If I can write such good strategies for free, there must be something better in my paid strategies. I offer support for a few months from the date of order for free because I want you to make money trading. I charge a small fee to share some of the best conservative and aggressive strategies and to offer you support. One more thing, my 15,000+ newsletter subscribers trust me and I cannot afford to break their trust.
Testimonial by Sankar – Os resultados podem variar para usuários.
Note: I trade these strategies in a very different way than what is mostly found online or traders do. Proper entry and exit rules are defined and its done in a very disciplined way. That is why traders are making money. You can find 100+ testimonials in these pages:
Links to All Course Testimonials Pages:
Testimonial by Deepak – Os resultados podem variar para usuários.
Course also includes my support for months, it includes Email, Phone and WhatsApp support. I offer support to make sure you understand my strategies well, hedging Options and Futures well, remove Greed and Fear (the biggest enemies of a trader) from your body and mind while trading and learn to live A Peaceful Life with Consistent Profits. Instant online payment is possible. For more information click here.
How Much Money Do You Need To Trade These Strategies?
To trade the non-directional strategies you will need only Rs. 75,000/- in your trading account. For the directional strategies you will need only Rs. 60,000/- in your trading account.
If you have more cash you can trade the conservative stock option. You will learn triple leverage – which means money making money from three places.
You can start trading from any day, it has nothing to do with expiry. Technical Analysis knowledge is NOT required.
To know how this course can help you its best to Call/WhatsApp me: 9051143004. Feel comfortable and call, I am not one of those professional guys. 🙂
Como funciona?
2. You SMS/WhatsApp/Email me your name, email, city, fee paid and bank name.
3. The same day I send you the course materials in your email.
4. You read the strategies at home and take support from me to understand them.
5. You start paper trading.
6. After about a month you start real trading.
This is What Traders Who Have Taken My Course Has to Say:
Testimonial by Manohar – Os resultados podem variar para usuários.
Testimonial by Karthik – Os resultados podem variar para usuários.
Testimonial by Shiv – Os resultados podem variar para usuários.
Testimonial by Chandrashekar – Os resultados podem variar para usuários.
Please note that this was typical and it is not possible to get such a big return in every trade. Results can vary from trade to trade.
Testimonial by Saravanan – Os resultados podem variar para usuários.
Testimonial by Cheliyan – Os resultados podem variar para usuários.
Testimonial by Allen – Os resultados podem variar para usuários.
Testimonial by Ashok – Os resultados podem variar para usuários.
You can make profits in some trades even after hitting stop loss like this one:
Testimonial by Shiv – Os resultados podem variar para usuários.
Testimonial by Vipul – Os resultados podem variar para usuários.
Testimonial by Himanshu – Os resultados podem variar para usuários.
I get a lot of Thank You calls and emails too. If they can make money why can’t you?
Disclaimer: Results may vary for users. Some make more some less but the idea is to learn, get education and trade.
Your Benefits:
Trade with Peace of Mind : You can trade without worrying about the stock markets. In fact when you will put on a trade I will ask you not to look at Nifty for the next one week. After that monitoring the trade once per day is required. Take time out for your life. Make Money Almost Every Month* : My goal will be to help you first reach a stage where you do not lose any money trading. Once that is reached you will start making small profits every month and then you can trade the directional trades that can bring very good returns. But this should be done when you are experienced trading my strategies. No Need to Predict the Direction of the Markets: These are all non-directional trades which means you need not predict the direction of the markets. One-half of your money will be guaranteed profitable. The other half also will be most of the times profitable, else we manage the trade. No Technical Analysis Required: You do not need to know Technical Analysis. These things are for traders who do intraday trades or do heavy leverage on futures or stocks. For options risk management is more important than Technical Analysis. I do not know Technical analysis either but still trade profitably. Simple Trades Based on Logic: When you talk to me you will understand that there is a logic behind these trades and not Technical. And the logic is very simple to understand. Positional Trades 10-30 Days: We take a position for around 10 to 30 days to get a good profit. Which means everyday trading is not required. 100% Hedged: If by chance there is a loss in the trade, the other position will make a profit. You can sleep better at night because the losses are limited. Limited Profits or Limited Losses: Profits are limited, but come almost in every trade. Only a few trades (approx 2 in 10) will show losses – but we will manage it and make sure the losses are small and few. Trade Only 2-4 Times a Month: Its obvious that if you trade less, there is no need to trade more that 2-4 times in a month. You can peacefully carry on with your job. No Need to Monitor the Trades Every Second: Since it takes some time before the profits starts rolling in, there is no need to monitor the trades every second. Just once a day is enough. When its time to take profits we just close the positions. Course on Email : This is convenient for both you and me. You can take the course right there in your home whenever you are free. Phone/Skype consultation is also possible.
This course is good if you have a regular job or business and cannot monitor your trades every second. All are positional and 100% hedged trades. There is NO chance of a huge loss whatever happens.
For more information contact me or Call/WhatsApp me on 9051143004. I can speak English & Hindi.
Once you start trading these strategies you will learn to manage risk. Managing risk is the most important trading decision. You will learn to totally control greed and be a disciplined trader. Within few months you will get confident in options trading.
IMP: The course is based on logic not on magic. Once you take the course and understand the logic behind the trades you will understand why it makes money almost every time its played. This should work even years after you have taken the course. You only invest a small amount to get knowledge to trade profitably for life.
Qual é a taxa do curso?
You get 5 great conservative strategies and a bonus trade where one of my clients made 37.8% return in one month. (Your results may vary). You can do the course by paying a onetime fee only of Rs.6000/-. No more charges. Sem taxas ocultas. The fees includes the Course Modules + Support on Email + Phone + WhatsApp for months. I offer support till you are successful trading the strategies on your own and do not need my help. I will send the strategies to your email in PDF documents within 24 hours of your payment.
One Time Fees For The Conservative Options & Futures Course & Support on Email for Six Months is Rs. 5000/- Only.
Once you enroll for the course you will get all the 5 strategies and a bonus strategy of 38% a month made by one of my client in your email within 24 hours of your payment. Your results may differ. You will get my personal support on Email only till you are successful trading my strategies. You will get support to understand the strategies for SIX (6) months. You will get IMPORTANT emails with ideas to trade my strategies and other ideas on trading till you are successful trading my strategies. I will continue support up to 6 months from the date of enrollment. With the help of my support emails you will get many ideas to trade on Nifty as well as on stocks. These emails DO NOT go to free subscribers. One time fees only for course and support for 6 months is FREE. You Do Not Have to pay anything more.
One Time Fees For The Conservative Options & Futures Course & Support on Phone, WhatsApp and Email for Six Months is Rs.6000/- Only.
Once you enroll for the course you will get all the 5 strategies and a bonus strategy of 38% a month made by one of my client in your email within 24 hours of your payment. Your results may differ. You will get my personal support on Phone + WhatsApp + Email till you are successful trading my strategies. You will get support to understand the strategies for SIX (6) months. You will get IMPORTANT emails with ideas to trade my strategies and other ideas on trading till you are successful trading my strategies. I will continue support up to 6 months from the date of enrollment. With the help of my support emails you will get many ideas to trade on Nifty as well as on stocks. These emails DO NOT go to free subscribers. One time fees only for course and support for 6 months is FREE. You Do Not Have to pay anything more.
Perguntas frequentes:
Ans & # 8211; Yes and No. Not because I cannot offer you a refund, but because I will offer you something that has value. And value has a price. Gaining knowledge has its own price. The money you pay is nothing compared to the knowledge you will gain from the course and what you will make from these trades in your life. Sorry by not giving a refund I am able to eliminate those not-serious traders. I don’t want people trading for fun to pay me, waste my time and their too and ask for a refund.
However, I only want very serious traders to do my course. I will be happy to talk and give a great service to traders who are serious about their money and trades. That said I will offer you a refund if you give me real reason why you want a refund. This will help me to improve my service. However you can ask for a refund within 7 days of paying for the course. Once refund is processed my service to you will stop immediately.
Q2. If I am unable to understand can I call you?
Ans & # 8211; Yes, if you do not understand something and want to call please do so. Remember this is a paid service so please get the best out of me when we are talking. Ask questions and clear your doubts. Please call only if you have taken the phone support. Otherwise email me for support.
Q3. I am not a technical person. I do not know technical analysis.
Ans & # 8211; I am not a technical analysis expert either. The beauty of my strategies is that no technical or fundamental analysis knowledge is required. If you know basics of options that is enough. Trades and not that complicated. Simple strategies make more than complicated ones.
Q4. I am in a full time job will I be able to trade using the strategies you provide?
Ans & # 8211; Yes because all are 100% hedged and positional trades. You will get enough time to take out profits or take a SL. Once you take the course you will know when to get ready to take out profits. Average time of a trade to hit profit is 10-15 days. You only need to see the values of the trade once in morning at around 10 am and once at around 2 pm and if everything is fine, you can continue with your job.
Q5. I do not live in India nor have an Indian bank account, but I want to get this course. Can I avail your service?
Ans & # 8211; Sim. If you can trade online it does not matter where you live. You just need to know the strategies that I want you to learn. You can trade them in any stock market. All markets in the world behave the same. If you love trading options it does not matter whether you trade in India’s index/stocks or any other country’s. What matters is how much knowledge you have about options and your willingness to learn conservative trades.
Options trading rules are the same in any market in any part of the world. So even if you are trading RUT (Russell 2000), or NDX (NASDAQ-100) or SPX (S&P 500 Index) you can trade these strategies. In fact my guru traded RUT. Yes I learned these strategies from a trader in the US. He was a market maker in COBE (Chicago Board Options Exchange). Now retired, he used to manage millions of dollars in trading account using the same strategies since 1980s.
Q6. I am not a rich man. I have little money in my Demat account.
Ans & # 8211; Isso não importa. If you have just Rs. 75,000 in your account you can trade these strategies. Though, because the account size is small you will have to trade less lots. Once you gain confidence and experience, you should invest more money in your trading account to make more.
Q7. I have a lot of money in my trading account. Can I invest crores in your strategies?
Ans & # 8211; The best way to start learning any new strategy is to start with 1 lot only even if you are a crorepati. Remember whether its one lot or hundreds or lots, your first job is to understand the logic behind the strategies, know why they make money and if they lose then whats your max loss, etc. Once the logic is clear you can start increasing the lot size. If you increase the lot size slowly, even if a stop loss is hit, a 1.5% loss will not damage your portfolio. Of course you know this a part of trading and you will recover your money. Within a few months you should be able to trade with a huge account. By that time you will also get good experience of trading these conservative strategies and you will not fear trading hundreds of lots.
Yes I want to generate wealth and am interested in your service. I want to learn directional and non-directional conservative option strategies for monthly income. Let me know how to pay.
P. S: Just to repeat these are the strategies you get when you take the course:
2 non-directional option strategies (1 purely non-directional, 1 almost always results in profits but needs to be played only if the first hits a stop loss), 1 stock option no loss strategy (slightly advanced strategy but works great) explained in details, & 2 conservative directional strategies – beautiful combination of Futures & Opções & # 8211; returns are better than the non-directional strategies – risk is less than the reward, on 10 you make 7, but you lose only 3 – direction needs to be predicted over a long period of time. If the stock goes against your view pretty fast, even 2% you still make some money. 🙂 Because the position is properly hedged you may take a 60 day time for your Future to hit target – mostly it does.
I am highly committed to my customers. I help them as much as possible. I always pick up the phone and reply emails as soon as possible. I do not have any employees but still give better service than big companies. This is the reason I charge Rs. 1000 extra for the phone service, as it takes my time. The course is good, but you must be willing to learn. I am here to help.
Thank You for showing interest in Learning Conservative Option Trading Strategies. Conservative Trading is not a get rich quick scheme. It is a process that can earn you consistent returns in the long run. I can help you learn conservative option trading where profits will be more, losses less and you can grow your trading account with time.
One Time Fees For The Conservative Options & Futures Course & Support on Email for Six Months is Rs. 5000/- Only.
Once you enroll for the course you will get all the 5 strategies and a bonus strategy of 38% a month made by one of my client in your email within 24 hours of your payment. Your results may differ. You will get my personal support on Email only till you are successful trading my strategies. You will get support to understand the strategies for SIX (6) months. You will get IMPORTANT emails with ideas to trade my strategies and other ideas on trading till you are successful trading my strategies. I will continue support up to 6 months from the date of enrollment. With the help of my support emails you will get many ideas to trade on Nifty as well as on stocks. These emails DO NOT go to free subscribers. One time fees only for course and support for 6 months is FREE. You Do Not Have to pay anything more.
One Time Fees For The Conservative Options & Futures Course & Support on Phone, WhatsApp and Email for Six Months is Rs.6000/- Only.
Once you enroll for the course you will get all the 5 strategies and a bonus strategy of 38% a month made by one of my client in your email within 24 hours of your payment. Your results may differ. You will get my personal support on Phone + WhatsApp + Email till you are successful trading my strategies. You will get support to understand the strategies for SIX (6) months. You will get IMPORTANT emails with ideas to trade my strategies and other ideas on trading till you are successful trading my strategies. I will continue support up to 6 months from the date of enrollment. With the help of my support emails you will get many ideas to trade on Nifty as well as on stocks. These emails DO NOT go to free subscribers. One time fees only for course and support for 6 months is FREE. You Do Not Have to pay anything more.
If you want to ask anything about this course contact me or feel comfortable to Call/SMS/WhatsApp me on 9051143004.
*Please understand that individual results will vary and stock market investments are subject to market risk. You are advised to research thoroughly before investing in any stock, option, future or mutual fund. It is your money invest carefully. Information in this site and course is for educational purpose, knowledge on finance and stock market trading only. It is not a recommendation to buy or sell any Stock, Option or Future. I am NOT a financial advisor or tip provider. I DO NOT give any tips in any form and DO NOT have any intention to give tips in future as well. I only give Stock Market Education in General and Derivative Trading Education in particular through this website. I have been reading and researching a lot on stock markets, futures and options since I started trading in 2007. Please read About Me page to know more about me.
Entre em contato comigo ou ligue-me no 9051143004 para obter mais informações.
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RENÚNCIA DE RIMA: Todas as referências neste site de renda feitas pelos comerciantes são fornecidas por eles através de Email ou WhatsApp como uma mensagem de agradecimento. No entanto, todo comércio depende do comerciante e do seu nível de capacidade, conhecimento e experiência de risco. Além disso, os investimentos no mercado de ações e as negociações estão sujeitas a riscos de mercado. Portanto, não há garantia de que todos obtenham os mesmos resultados ou resultados semelhantes. Meu objetivo é fazer de você um comerciante melhor e disciplinado com a negociação de ações e investir educação e estratégias que você obtém deste site. Observe que NÃO dou dicas ou serviços de consultoria por SMS, e-mail ou WhatsApp ou qualquer outra forma de mídia social. Eu cumpre rigorosamente as leis do meu país. Eu apenas ofereço educação sobre finanças, investimentos em mercados de ações da melhor maneira possível, tanto quanto eu posso através deste site. Ainda assim, você deve consultar um consultor autorizado ou fazer uma pesquisa completa antes de investir em qualquer ação ou derivativo antes de negociar qualquer estratégia dada neste site. Eu não sou responsável por qualquer decisão de investimento que você tomar depois de ler qualquer artigo dado neste site. O conhecimento é a única maneira de obter sucesso nos mercados de ações. Procuro o meu melhor para investir no mercado de ações e comercializar os conhecimentos através dos artigos publicados neste site. Obrigado por visitar meu site.
Opção Consevativa & # 038; Curso futuro.
Eu sou Dilip Shaw. Eu sou um comerciante como você. Eu tenho negociado desde 2007, mas perdi muito dinheiro até 2018. Então, parei de negociar e estudava opções como exames da faculdade. Começou a negociar novamente a partir de 2018 e nunca mais olhei para trás. Eu fiz muita pesquisa, leio livros e fiz inúmeras operações de papel antes de ser lucrativo. Você pode ler sobre mim aqui.
Meu curso comercial conservador desde 2017 está ajudando muitos comerciantes de varejo, como você, que têm um emprego ou negócios a obter ganhos consistentes como este: (Clique aqui para mais depoimentos.) Você pode fazer esse curso de sua casa. Alguns comerciantes fazem lucros incríveis como Rs. 16,26 lucro de lakhs em 5 dias, embora os resultados possam ser diferentes para todos.
Este curso ajuda você a aprender a negociar estratégias de opções conservadoras para a renda mensal. Depois de terminar o curso, você pode começar a negociar imediatamente. Você pode começar a negociar a partir de qualquer dia. Não há necessidade de aguardar o caducidade. Você ganhará consistentemente.
Este curso é bom se você tiver um emprego ou trabalho regular. Você NÃO PRECISA monitorar seus negócios a cada segundo.
Antes de ler, entenda isso para todas as 5 estratégias, a seleção da greve será ensinada. A seleção de greve enquanto a opção de negociação é a parte mais essencial para o sucesso.
Você obtém duas estratégias conservadoras não direcionais sobre opções, uma estratégia conservadora de opção de estoque e duas estratégias diretivas conservadoras no Future & amp; Combinação de opções.
Negociações não direcionais são rentáveis ​​80% das vezes e fazem 3-5% por comércio (Os resultados podem variar).
Estratégia direcional gera dinheiro rápido. Não importa de que lado o estoque se move. Na verdade, você faz mais quando você está errado no comércio futuro. 🙂 Alguns lucros incríveis aqui possíveis.
O comércio de opções de estoque faz 30 mil em um comércio e, se o SL for atingido, há uma maneira de recuperar perdas e fazer 30k nesse comércio.
Não é necessário conhecimento técnico. Não há necessidade de monitorar negócios a cada segundo.
No curso, você aprenderá como selecionar os preços de exercício. Você aprende quando trocar, que ataca para vender o que comprar, qual o lucro que você deve procurar, o melhor lugar para tirar a perda e o que fazer depois de tomar uma parada de perda - significa como recuperar esse dinheiro. A taxa de sucesso é superior a 80%.
Uma vez que os negócios são corretamente cobertos, não há estresse na negociação de minhas estratégias.
Estou muito confiante de que você ganhará dinheiro negociando minhas estratégias. Para ajudá-lo a ter sucesso, ofereço poucos meses de suporte GRATUITO.
11 razões pelas quais você deve fazer o curso:
1. AT Knowledge não é necessário.
3. Monitoramento Regular NÃO É necessário.
5. Faça o curso de sua casa.
11. Suporte GRATUITO para os meses.
Para saber mais Call / SMS / WhatsAppe-me no 9051143004 ou envie-me um e-mail agora. Conheço inglês e hindi.
Você pode encontrar muitos depoimentos nestas páginas:
P. S: tantos anos de negociação me achavam uma coisa # 8211; é sempre melhor fazer pequenos lucros mês após mês, em vez de perder dinheiro mês após mês, tentando ganhar muito dinheiro. Isso nunca acontece. Mas o dinheiro pequeno acumulado mês após mês pode tornar-se muito grande em apenas alguns anos.
Como a nossa página do Facebook e obtenha atualizações de mensagens instantâneas para a vida.

O Guia Opções & Futuros.
Aprenda a negociação de opções e você pode lucrar com qualquer condição de mercado. Compreenda como negociar o mercado de opções usando a ampla gama de estratégias de opções.
Descubra novas oportunidades de negociação e as várias formas de diversificar sua carteira de investimentos com futuros básicos e financeiros.
Para ajudá-lo em seu caminho para a compreensão do mundo complexo de derivativos financeiros, oferecemos um recurso abrangente de educação para negociação de futuros e opções que inclui tutoriais, dicas e conselhos detalhados aqui no Guia de opções.
Gráficos de lucro são representações visuais dos possíveis resultados das estratégias de opções. O lucro ou a perda são representados graficamente no eixo vertical enquanto o preço do estoque subjacente na data de validade é representado graficamente no eixo horizontal.
Fundamentos das opções:
Antes de começar as opções de negociação, você deve saber o que é exatamente uma opção de compra de ações e entender os dois tipos básicos de contratos de opções - coloca e chamadas. Saiba como funcionam e como trocá-los por lucros. [Consulte Mais informação. ]
Fundamentos das opções binárias:
A negociação de opções binárias está rapidamente a ganhar popularidade desde a sua introdução em 2008. Confira nosso guia completo para trocar opções binárias. [Consulte Mais informação. ]
Estratégia para iniciantes:
A chamada coberta é uma estratégia de negociação de opção popular que permite que um acionista ganhe renda adicional vendendo chamadas contra a retenção de seu estoque. [Consulte Mais informação. ]
Conselho de opção de ações:
Comprar straddles é uma ótima maneira de jogar ganhos. Muitas vezes, a diferença de preço das ações para cima ou para baixo seguindo o relatório de ganhos trimestrais, mas muitas vezes, a direção do movimento pode ser imprevisível. Por exemplo, uma venda pode ocorrer mesmo que o relatório de ganhos seja bom se os investidores esperassem excelentes resultados. [Consulte Mais informação. ]
Opção Opção Conceitos básicos de negociação:
Para o investidor de curto a médio prazo, o investimento em opções de ações fornece um conjunto adicional de opções de investimento para permitir que ele use melhor seu capital de investimento. [Consulte Mais informação. ]
Conceitos Avançados:
Quando as opções de negociação, você encontrará o uso de certos alfabetos gregos, como delta ou gamma, ao descrever riscos associados a várias posições de opções. Eles são conhecidos como "os gregos". [Consulte Mais informação. ]
Conselho de troca de opções:
Muitos comerciantes de opções tendem a ignorar os efeitos das taxas de comissão em seus lucros ou prejuízos globais. É fácil esquecer a taxa de comissão mínima de US $ 15 quando todo comércio lucrativo mata US $ 500 ou mais. Heck, é apenas 3% certo. [Consulte Mais informação. ]
Guia de Opções de Ações:
Os dividendos em dinheiro emitidos por ações têm grande impacto nos preços das opções. Isso ocorre porque o preço do estoque subjacente deve cair pelo valor do dividendo na data do ex-dividendo. [Consulte Mais informação. ]
Conceitos Avançados:
Saiba mais sobre a proporção de apontar, a forma como ela é derivada e como ela pode ser usada como um indicador contrário. [Consulte Mais informação. ]
Conceitos Avançados:
Outra maneira de jogar o mercado de futuros é através de opções de futuros. O uso de opções para negociar futuros oferece alavancagem adicional e abre mais oportunidades de negociação para o comerciante experiente. [Consulte Mais informação. ]
Conselho de opção de ações:
As opções de negociação do dia podem ser uma estratégia bem sucedida e rentável, mas há algumas coisas que você precisa saber antes de usar começar a usar opções para o dia comercial. [Consulte Mais informação. ]
Opções de ações Tutorial:
Se você é muito otimista em um estoque específico para o longo prazo e está procurando comprar o estoque, mas sente que está um pouco sobrevalorizado no momento, então você pode querer considerar escrever opções no estoque como um meio para adquiri-lo em um desconto. [Consulte Mais informação. ]
Guia de Opções de Ações:
Para obter retornos mais altos no mercado de ações, além de fazer mais lição de casa nas empresas que deseja comprar, muitas vezes é necessário assumir maior risco. Uma maneira mais comum de fazer isso é comprar ações na margem. [Consulte Mais informação. ]
Tutorial de opções de ações:
Algumas ações pagam dividendos generosos a cada trimestre. Você qualifica o dividendo se você estiver segurando as ações antes da data do ex-dividendo. [Consulte Mais informação. ]
Siga-nos no Facebook para obter estratégias diárias e amp; Dicas!
Opções básicas.
Futures Basics.
Estratégias Bullish.
Estratégias baixistas.
Estratégias neutras.
Posições sintéticas.
Opções Arbitrage.
Aviso de Risco: as ações, futuros e negociação de opções binárias discutidas neste site podem ser consideradas Operações de Negociação de Alto Risco e sua execução pode ser muito arriscada e pode resultar em perdas significativas ou mesmo em uma perda total de todos os fundos em sua conta. Você não deve arriscar mais do que você pode perder. Antes de decidir comercializar, você precisa garantir que compreenda os riscos envolvidos levando em consideração seus objetivos de investimento e nível de experiência. As informações contidas neste site são fornecidas apenas para fins informativos e educacionais e não se destinam a ser um serviço de recomendação comercial. TheOptionsGuide não será responsável por erros, omissões ou atrasos no conteúdo, ou por quaisquer ações tomadas com base nisso.
Os produtos financeiros oferecidos pela empresa possuem alto nível de risco e podem resultar na perda de todos os seus fundos. Você nunca deve investir dinheiro que não pode perder.

Option trading in telugu

With the possible exception of futures contracts, trading is not a zero-sum game. In other words, for every winner there doesn't have to be a loser. Therefore, because there are so many different combinations and ways options can be hedged against each other, it doesn't make sense to look at overall figures (e. g., the number of options that expire worthless) and reach conclusions about how many people made or lost money.
For simplicity, let's take the case of a spread. The fact that one person made money buying a butterfly does not automatically mean that someone else lost. Instead, the person who sold the butterfly may have traded out of the position using spreads or by selling individual options. For every person who is long a butterfly, call spread, put spread, or whatever, there are not necessarily people who are short the corresponding position. As such, the profitability of their positions will necessarily differ.
In many respects, option trading is a game of strategy not unlike competitive sports or chess tournaments. The main difference is that in trading there are more players and multiple agendas. To succeed, it's important to have a knowledge and appreciation of the other players. In general terms, you must gain an appreciation for the behavior and motivations of the different players.
In the option markets, the players fall into four categories: The Exchanges Financial Institution Market Makers Individual (Retail) Investors.
What follows is a brief overview of each group along with insights into their trading objectives and strategies.
The exchange is a pblace where market makers and traders gather to buy and sell stocks, options, bonds, futures, and other financial instruments. Since 1973 when the Chicago Board Options Exchange first began trading options, a number of other players have emerged. At first, the exchanges each maintained separate listings and therefore didn't trade the same contracts. In recent years this has changed.
Now that BSE and NSE both these exchanges list and trade the same contracts, they compete with each other. Nevertheless, even though a stock may be listed on multiple exchanges, one exchange generally handles the bulk of the volume. This would be considered the dominant exchange for that particular option.
The competition between exchanges has been particularly valuable to professional traders who have created complex computer programs to monitor price discrepancies between exchanges. These discrepancies, though small, can be extraordinarily profitable for traders with the ability and speed to take advantage. More often than not, professional traders simply use multiple exchanges to get the best prices on their trades.
Deciding between the two would be simply a matter of choosing the exchange that does the most trading in this contract. The more volume the exchange does, the more liquid the contract. Greater liquidity increases the likelihood the trade will get filled at the best price.
Financial institutions are pbrofessional investment management companies that typically fall into several main categories: mutual funds, hedge funds, insurance companies, stock funds. In each case, these money managers control large portfolios of stocks, options, and other financial instruments. Although individual strategies differ, institutions share the same goal-to outperform the market. In a very real sense, their livelihood depends on performance because the investors who make up any fund tend to be a fickle group. When fund don't perform, investors are often quick to move money in search of higher returns.
Where individual investors might be more likely to trade equity options related to specific stocks, fund managers often use index options to better approximate their overall portfolios. For example, a fund that invests heavily in a broad range of tech stocks will use NSE Nifty Index options rather than separate options for each stock in their portfolio. Theoretically, the performance of this index would be relatively close to the performance of a subset of comparable high tech stocks the fund manager might have in his or her portfolio.
Market makers are the traders on the floor of the exchanges who create liquidity by providing two-sided markets. In each counter, the competition between market makers keeps the spread between the bid and the offer relatively narrow. Nevertheless, it's the spread that partially compensates market makers for the risk of willingly taking either side of a trade.
For market makers, the ideal situation would be to "scalp" every trade. More often than not, however, market makers don't benefit from an endless flow of perfectly offsetting trades to scalp. As a result, they have to find other ways to profit. In general, there are four trading techniques that characterize how different market makers trade options. Any or all of these techniques may be employed by the same market maker depending on trading conditions. Day Traders Premium Sellers Spread Traders Theoretical Traders.
Day traders, on or off the trading screen, tend to use small positions to capitalize on intra-day market movement. Since their objective is not to hold a position for extended periods, day traders generally don't hedge options with the underlying stock. At the same time, they tend to be less concerned about delta, gamma, and other highly analytical aspects of option pricing.
Just like the name implies, premium sellers tend to focus their efforts selling high priced options and taking advantage of the time decay factor by buying them later at a lower price. This strategy works well in the absence of large, unexpected price swings but can be extremely risky when volatility skyrockets.
Like other market makers, spread traders often end up with large positions but they get there by focusing on spreads. In this way, even the largest of positions will be somewhat naturally hedged. Spread traders employ a variety of strategies buying certain options and selling others to offset the risk. Some of these strategies like reversals, conversions, and boxes are primarily used by floor traders because they take advantage of minor price discrepancies that often only exist for seconds. However, spread traders will use strategies like butterflies, condors, call spreads, and put spreads that can be used quite effectively by individual investors.
By readily making two-sided markets, market makers often find themselves with substantial option positions across a variety of months and strike prices. The same thing happens to theoretical traders who use complex mathematical models to sell options that are overpriced and buy options that are relatively underpriced. Of the four groups, theoretical traders are often the most analytical in that they are constantly evaluating their position to determine the effects of changes in price, volatility, and time.
As option volume increases, the role of individual investors becomes more important because they account for over 90% of the volume. That's especially impressive when you consider that option volume in February 2000 was 56.2 million contracts-an astounding 85% increase over February 1999.
The Psychology of the Individual Investor.
From a psychological standpoint, individual investors are in interesting group because there are probably as many strategies and objectives as there are individuals. For some, options are a means to generate additional income through relatively conservative strategies such as covered calls. For others, options in the form of protective puts provide an excellent form of insurance to lock in profits or prevent losses from new positions. More risk tolerant individuals use options for the leverage they provide. These people are willing to trade options for large percentage gains even knowing their entire investment may be on the line.
In a sense, taking a position in the market automatically means that you are competing with countless investors from the categories described above. While that may be true, avoid making direct comparisons when it comes to your trading results. The only person you should compete with is yourself. As long as you are learning, improving, and having fun, it doesn't matter how the rest of the world is doing.
HOW TO HEDGE RISK AND PROTECT PROFITS WITH OPTIONS?
Professional traders (known in the industry as market makers or market operators), often think that for the beginning investor, option trading must seem similar to putting together a puzzle without the aid of a picture. You can find the picture if you know where to look. Looking through the eyes of a professional market maker is one of the best ways to learn about trading options under real market conditions. This experience will help you understand how real-world changes in option pricing variables affect an option's value and the risks associated with that option. Furthermore, because market makers are essentially responsible for what the option market looks like, you need to be familiar with their role and the strategies that they use in order to a regulate a liquid market and ensure their own profit.
We will provide an overview of the practices of market makers and explore their mindset as the architects of the option business. First, we will consider the logistics of a market maker's responsibilities. How do market makers respond to supply and demand to ensure a liquid market? How do they assess the value of an option based on market conditions and demands? In the second part of this chapter, we will consider the profit-oriented objectives of a market maker. How is market making like any other business? How does a market maker profit? What does it mean to hedge a position, and how does a market maker use hedging to minimize risk?
The image of an electronic trading terminal is not unfamiliar to the Indian imagination, but many people might not know who the players behind the screen are. Market makers, brokers, fund managers, retail traders and investors occupy trading terminals across India. Thousands of trading terminals across 250 cities of India are combined, they represent the marketplace for option trading. The exchange itself provides the location, regulatory body, computer technology, and staff that are necessary to support and monitor trading activity. Market makers are said to actually make the option market, whereas brokers represent the public orders.
In general, market makers might make markets in up 30 or more issues and compete with one another for customer buy and sell orders in those issues. Market makers trade using either their own capital or trade for a firm that supplies them with capital. The market maker's activity, which takes place increasingly through computer execution, represents the central processing unit of the option industry. If we consider the exchange itself as the backbone of the industry, the action in the Mumbai's broking offices represents the industry's brain and industry, heart. As both a catalyst for trading and a profiteer in his or her own right, the market maker's role in the industry is well worth closer examination.
Individual trader versus market maker.
The evaluation of an option's worth by individual traders and market makers, respectively, is the foundation of option trading. Trader and market maker alike buy and sell the products that they foresee as profitable. From this perspective, no difference exists between a market maker and the individual option trader. More formally, however, the difference between you and the market maker is responsible for creating the option industry, as we know it.
Essentially, market makers are professional, large-volume option traders whose own trading serves the public by creating liquidity and depth in the marketplace. On a daily basis, market makers account for up to half of all option trading volume, and much of this activity is responsible for creating and ensuring a two-sided market made up of the best bids and offers for public customers. A market maker's trading activity takes place under the conditions of a contractual relationship with an exchange. As members of the exchange, market makers must pay dues and lease or own a seat on the floor in order to trade. More importantly, a market maker's relationship with the exchange requires him or her to trade all of the issues that are assigned to his or her primary pit on the option floor. In return, the market maker is able to occupy a privileged position in the option market - market makers are the merchants in the option industry; they are in a position to create the market (bid and ask) and then buy on their bid and sell on their offer.
The main difference between a market maker and retail traders is that the market maker's position is primarily dictated by customer order flow. The market maker does not have the luxury of picking and choosing his or her position. Just like the book makers in Las Vegas casinos who set the odds and then accommodate individual betters who select which side of the bet that they want, a market maker's job is to supply a market in the options, a bid and an offer, and then let the public decide whether to buy or sell at those prices, thereby taking the other side of the bet.
As the official option merchants, market makers are in a position to buy option wholesale and sell them at retail. That said, the two main differences between market makers and other merchants is that market makers commonly sell before they buy, and the value of their inventory fluctuates as the price of stock fluctuates. As with all merchants, though, a familiarity with the product pays off. The market maker's years of experience with market conditions and trading practices in general - including an array of trading strategies - enables him or her to establish an edge (however slight) over the market. This edge is the basis for the market maker's potential wealth.
Smart trading styles of market operators.
Throughout the trading day, market makers generally use one of two trading styles: scalping or position trading. Scalping is a simpler trading style that an ever-diminishing number of traders use. Position trading, which is divided into a number of subcategories, is used by the greatest percentage of all market makers. As we have discussed, most market maker's position are dictated to them by the public's order flow. Each individual market maker will accumulate and hedge this order flow differently, generally preferring one style of trading over another. A market maker's trading style might have to do with a belief that one style is more profitable then another or might be because of a trader's general personality and perception of risk.
The scalper generally attempts to buy an option on the bid and sell it on the offer (or sell on the offer and buy on the bid) in an effort to capture the difference without creating an option position. Scalpers profit from trading what is referred to as the bid / ask spread, the difference between the bid price and the ask price.
For example, if the market on the Nifty July 1130 puts is 15 (bid) - 15.98 (ask), this trader will buy an option order that comes into the trading pit on the bid along with the rest of the crowd. This trader is now focused on selling these puts for a profit, rather than hedging the options and creating a position. Due to the lack of commission paid by market makers, this trader can sell the first 15.20 bid that enters the trading crowd and still make a profit, known in the financial industry as a scalp.
The trader has just made a profit without creating a position. Sometimes holding and hedging a position is unavoidable, however. Still this style of trading is generally less risky, because the trader will maintain only small positions with little risk. The scalper is less common these days because the listing of options on more than one exchange (dual listing) has increased competition and decreased the bid/ask spread. The scalper can make money only when customers are buying and selling options in equal amounts. Because customer order-flow is generally one-sided (either customers are just buying or just selling) the ability to scalp options is rare. Scalpers, therefore, are generally found in trading pits trading stocks that have large option order flow. The scalper is a rare breed on the trading floor, and the advent of dual listing and competing exchanges has made scalpers an endangered species.
The position trader generally has an option position that is created while accommodating public order flow and hedging the resulting risk. This type of trading is more risky because the market maker might be assuming directional risk, volatility risk, or interest rate risk, to name a few. Correspondingly, market makers can assume a number of positions relative to these variables. Generally the two common types of position traders are either backspreaders or frontspreaders.
Essentially, backspreaders are traders who accumulate (buy) more options than they sell and, therefore, have theoretically large or unlimited profit potential. For example, a long straddle would be considered a backspread. In this situation, we purchase the 50 level call and put (an ATM strike would be delta neutral). As the underlying asset declines in value, the call will increases in value. In order for the position to profit, the value of the rising option must increase more than the value of the declining option, or the trader must actively trade stock against the position, scalping stock as the deltas change.
The position could also profit from an increase in volatility, which would increase the value of both the call and put. As volatility increases, the trader might sell out the position for a profit or sell options (at the higher volatility) against the ones she owns. The position has large or unlimited profit potential and limited risk.
As we know from previous chapters, there is a multitude of risks associated with having an inventory of options. Generally, the greatest risk associated with a backspread is time decay. Vega is also an important factor. If volatility decreases dramatically, a backspreader might be forced to close out his position at less than favorable prices and may sustain a large loss. The backspreader is relying on movement in the underlying asset or an increase in volatility.
The opposite of a backspreader, the frontspreader generally sells more options then he or she owns and, therefore, has limited profit potential and unlimited risk. Using the previous example, the frontspreader would be the seller of the 150 level call and put, short the 150 level straddle. In this situation, the market maker would profit from the position if the underlying asset failed to move outside the premium received for the sale prior to expiration. Generally, the frontspreader is looking for a decrease in volatility and/or little to no movement in the underlying asset.
The position also could profit from a decrease in volatility, which would decrease the value of both the call and put. As volatility decreases, the trader might buy in the position for a profit or buy options (at the lower volatility) against the ones he or she is short. The position has limited profit potential and unlimited risk.
When considering these styles of trading, it is important to recognize that a trader can trade the underlying stock to either create profit or manage risk. The backspreader will purchase stock as the stock decreases in value and sell the stock as the stock increase, thereby scalping the stock for a profit. Scalping the underlying stock, even when the stock is trading within a range less than the premium paid for the position, cannot only pay for the position but can create a profit above the initial investment. Backspreaders are able to do this with minimal risk because their position has positive gamma (curvature). This means that as the underlying asset declines in price, the positions will accumulate negative deltas, and the trader might purchase stock against those deltas. As the underlying asset increases in price, the position will accumulate positive deltas, and the trader might sell stock. Generally, a backspreader will buy and sell stock against his or her delta position to create a positive scalp.
Similarly, a frontspreader can use the same technique to manage risk and maintain the profit potential of the position. A frontspread position will have negative gamma (negative curvature). Staying delta neutral can help a frontspreader avoid losses. A diligent frontspreader can descalp (scalping for a loss) the underlying asset and reduce her profits by only a small margin. Barring any gap in the underlying asset, disciplined buying and selling of the underlying asset can keep any loss to a minimum.
To complicate matters further, a backspreader or frontspreader might initiate a position that has speculative features. Two examples follow.
These traders put on a position that favors one directional move in the underlying asset over another. This trader is speculating that the stock will move either up or down. This type of trading can be extremely risky because the trader favors one direction to the exclusion of protecting the risk that is associated with movement to the other side. For example, a trader who believes that the underlying asset has sold off considerably might buy calls and sell puts. Both of these transactions will profit from a rise in the underlying asset; however, if the underlying asset were to continue downward, the position might lose a great deal of money.
Volatility traders will generally make an assumption about the direction of the option volatility. For these traders, whether or not to buy or sell a call or put is based on an assessment of option volatility. Forecasting changes in volatility is typically an option trader's biggest challenge. As discussed previously, volatility is important because it is one of the principal factors used to estimate an option's price. A volatility trader will buy options that are priced below his or her volatility assumption and sell options that are trading above the assumption. If the portfolio is balanced as to the number of options bought and sold (options with similar characteristics such as expiration date and strike), the position will have little vega risk. However, if the trader sells more volatility than he or she buys, or vice versa, the position could lose a great deal of money on a volatility move.
HOW MARKET OPERATORS WILL TRAP THE PUBLIC?
In general, the market maker begins his or her assessment by using a pricing formula to generate a theoretical value for an option and then creating a market around that value. This process entails creating a bid beneath the market maker's fair value and an offer above the market maker's fair value of the option. Remember that the market maker has a legal responsibility to ensure a liquid marketplace through supplying a bid/risk spread. The trading public then can either purchase or sell the options based on market-maker listings, or it can negotiate with the market maker for a price that is between the posted bid/risk prices (based on his or her respective calculations of the option's theoretical value).
In most cases, the difference between market maker and individual investor bids and offers are a matter of pennies (what we might consider fractional profits). For the market maker, however, the key is volume. Like a casino, the market maker will manage risk so that she can stay in the game time after time and make a Rs.1 here and a Rs.5 there. These profits add up. Like the casino, a market maker will experience loss occasionally; however, through risk management, he or she attempts to stay in the business long enough to win more than he or she loses.
Another analogy can be found in the relationship between a buyer and used car dealer. A car dealer might make a bid on a used car for an amount that is less than what he is able to resell the car for in the marketplace. He or she can make a profit by buying the car for one price and selling it for a greater price. When determining the amount that he or she is willing to pay, the dealer must make an assumption of the future value of the car. If he is incorrect about how much someone will purchase the car for, then the dealer will take a loss on the transaction. If correct, however, the dealer stands to make a profit. On the other hand, the owner of the car might reject the dealer's original bid for the car and ask for a greater amount of money, thereby coming in between the dealer's bid/risk market. If the dealer assesses that the price that the owner is requesting for the car still enables a profit, he or she might buy the car regardless of the higher price. Similarly, when a market maker determines whether he or she will pay (or sell) one price over another, he or she determines not only the theoretical value of the option buy also whether or not the option is a specific fir for risk-management purposes. There might be times when a market maker will forego the theoretical edge or trade for a negative theoretical edge for the sole purpose of risk management.
Before proceeding with our discussion of the market maker's trading activity in detail, let us again refer to the casino analogy. The house at a casino benefits largely from its familiarity with the business of gambling and the behavior of betters. As an institution, it also benefits from keeping a level head and certainly from being well (if not better) informed than its patrons about the logistics of its games and strategies for winning. Similarly, a market maker must be able to assess at a moment's notice how to respond to diverse market conditions that can be as tangible as a change in interest rates or as intangible as an emotional trading frenzy based on a news report. Discipline, education, and experience are a market maker's best insurance. We mention this here because, as an individual investor, you can use these guidelines to help you compete wisely with a market maker and to become a successful options trader.
Market making as a business.
In the previous section, we addressed rather conceptually, how a market maker works in relation to the market (and, in particular, in relation to you, the individual trader). A market maker's actual practices are dictated by a number of bottom-line business concerns, however, which require constant attention throughout the trading day. Like any business owner, a market maker has to follow business logic, and he or she must consider the wisest uses of his or her capital. There are number of factors that you should consider when assessing whether an option trade is a good or bad business decision. At base, the steps that a market maker takes are as follows:
1. Determining the current theoretical fair value of an option. (As we have discussed, the market maker can perform this task with the use of a mathematical pricing model.)
2. Attempting to determine the future value of an option. Buying the option if you think that it will increase in value or selling the option if you think that it will decreases in value. This is done through the assessment of market factors that may affect the value of an option. These factors include : Interest rates Volatility Dividends Price of the underlying stock.
3. Determining whether the capital can be spent better elsewhere. For example, if the interest saved through the purchase of a call (instead of the outright purchase of the stock) exceeds the dividend that would have been received through owning the stock, then it is better to purchase the call.
4. Calculating the long stock interest that is paid for borrowing funds in order to purchase the stocks and considering whether the money used to purchase the underlying stock would be better invested in an interest-bearing account. If so, would buying call options instead of the stock be a better trade?
5. Calculating whether the interest received from the sale of short stock is more favorable than purchasing puts on the underlying stock. Is the combination of owning calls and selling the underlying stock a better trade than the outright purchase of puts?
6. Checking for arbitrage possibilities. Like the preceding step, this task entails determining whether one trade is better than another. In the section on synthetics, we explored the possibility of creating a position with the same profit/loss characteristics as another by using different components. At times, it will be more cost effective to put on a position synthetically. Arbitrage traders take advantage of price differentials between the same product on different markets or equivalent products on the same market. For example, a differential between an option and the actual underlying stock can be exploited for profit. The three factors to base this decision on are as follows: The level of the underlying asset. The interest rate.
For example, if you buy a call option, you save the interest on the money that you would have had to pay for the underlying stock. Conversely, if you purchase a put, you lose the short stock interest that you could be receiving from the sale of the underlying stock.
The dividend rate. If you buy a call option, you lose the dividends that you would have earned by actually holding the stock.
7. Finally, determining the risk associated with the option trade.
As previously discussed, all of the factors that contribute to the price of the option are potential risk factors to an existing position. As we know, if the factors that determine the price of an option change, then the value of an option will change. This risk associated with these changes can be alleviated through the direct purchase or sale of an offsetting option or the underlying stock. This process is referred to as hedging.
A market maker's complex positioning.
As we mentioned earlier, the bulk of a market maker's trading is not based on market speculation but on the small edge that can be captured within each trade. Because the market maker must trade in such large volumes in order to capitalize on fractional profits, it is imperative that he or she manage the existing risks of a position. For example, in order to retain the edge associated with the trade, he or she might need to add to the position when necessary by buying or selling shares of an underlying asset or by trading additional options.
In fact, it is not uncommon that once the trade has been executed, the trader an opposite market position in the underlying security or in any other available options. Over time, a large position consisting of a multitude of option contracts and a position in the underlying stock is established. The market maker's job at this point is to continue to trade for theoretical edge while maintaining a hedged position to alleviate risk. In the following section, we will review the basics of risk management in the form of hedging. Although market makers are the masters of hedging, hedged positions are essential for the risk management for all option traders. It will be equally important for you to understand how to use these strategies.
THE TRUMP CARD OF MARKET OPERATORS: HEDGING.
Thus far, we have overviewed the logistics of the market maker's business model and have seen how it functions to both serve the trading public and the market maker simultaneously. Now we will consider how market makers work to secure their edge against the ongoing risks presented to their many positions.
An investor who chooses to invest in a particular market is exposed to the risks that are inherent in that market. The specific risk is high if the investor concentrates on one security only. The more a portfolio is diversified, the lesser the specific risk. Hedging is the most basic strategy that an investor can use in order to guard against loss. A hedge position is taken with the specific intent of lowering risk. As we have learned, option positions are susceptible to more than just simple directional price risks, and therefore, a trader must be concerned with more than simple delta neutral trading. There is risk associated with each of the variables that determine an option's value (from interest rates to time until expiration).
In order to minimize the effect of these risks to an option's value, a trader will establish a position with offsetting characteristics. Just as you hedge a bet by betting against your original bet too a lesser degree, market makers try to take on complementary positions (in stock or options) with characteristics that can potentially buffer against exposure to loss. A hedge, then, is a position that is established for the sole purpose of protecting an existing position.
Determining what risks an option position might be exposed to is one of the first steps towards determining how best to hedge risk. We have learned that six risks are associated with an option position:
Directional risk (delta risk) is the risk that an option's value will change as the underlying asset changes in value. All other factors aside, as the price of an underlying asset decreases, the value of a call will decrease while the price of the put will increase. Conversely, as the underlying asset increases in value, a call will increases in value as the put decreases in value. Delta risk can easily be offset through the purchase or sale of an option or stock with opposing directional characteristics. Directional hedges are illustrated in Tables 1 and 2.
Table 1: Delta Effects.
When the Underlying Security .
Increase in Value.
Decrease in Value.
The Long Call will .
Increase in Value.
Decrease in Value.
The Short Call will .
Decrease in Value.
Increase in Value.
The Long Put will .
Decrease in Value.
Increase in Value.
The Short Put will .
Increase in Value.
Decrease in Value.
Table 2: Position hedges.
Long Call Increases in value as the underlying increases in value.
Short Call Decreases in value as the underlying increases in value.
Long Put Decreases in value as the underlying increases in value.
Short Put Increases in value as the underlying decreases in value.
Gamma risk is the risk that the delta of an option will change. The holder of options is long gamma (backspreader) and the seller of options is short gamma (frontspreader). Sometimes referred to as curvature, gamma can be offset through the purchase or sale of options with opposing gammas.
Volatility risk (vega risk) is the risk that the volatility assumption used in pricing the options will change. If the option volatility rises, the value of the calls and puts will increase. The holder of any options might benefit from an increase in volatility whereas the seller might incur a loss. This risk can be offset through the purchase or sale of option contracts that have an opposing vega value. For example, we know that options decrease in value as volatility decreases. Therefore, selling options (that benefit as volatility decreases) might be the best hedge for a trader who is looking to offset vega risk.
Time decay (theta risk) is a positions exposure to the effects of a change in the amount of time remaining to expiration. We know that time moves forward and as it does, the time value of an option decreases. This exposure can be offset through the purchase or sale of options with opposite theta characteristics. The effects of time decay on an options value are illustrated below.
Effects of Theta.
As Time Moves Forward.
Value remains constant.
Decrease in Value.
Increase in Value.
Decrease in Value.
Increase in Value.
Interest rate risk (rho risk) is negligible to most traders. Its impact can be substantial if a position contains a large amount of long or short stock or long-term options. Decreasing the stock position, replacing stock with options is the most efficient way to reduce rho risk. Remember, longer-term options are more interest rate sensitive.
Dividend risk can be offset through the purchase or sale of options or the underlying stock. An increase in the dividend will make the call decrease in value because the holder of the call does not receive the dividend. In this situation, it is more advantageous to own the underlying asset over owning the call. Conversely, the put will increase in value when the dividend is increased because the short stock seller must pay the dividend to the lender of the stock, which makes owning the put more desirable than shorting the underlying asset.
Table 4 illustrates the effects of changing input variables on an option's theoretical value.
Varying market conditions.
As market conditions change the values of.
Rise in price of the underlying.
Interest rates Rise.
Knowing the risks involved with options trading is the first step to successful trading while hedging these risks to create a profitable position is the second step. We have learned that there are different ways to hedge each trade, providing a market maker with the important task of determining the best hedge possible for each trade he or she executes. Determining which hedge is the best is based on knowing not only the risks of the original trade but also the corresponding risk of the hedge. Observing actual positions under a multitude of conditions is by far the best way to learn the complex nuances of options. The next two chapters will guide the reader through the fundamentals of the marketplace and setting up a trading station, giving the investor the ability to begin trading on his or her own.
HOW TO SELECT AN OPTIONS BROKER.
Once you've made the decision to trade online, it's important to identify a brokerage firm that will meet, and preferably exceed, your expectations. This is especially true in the options trading arena because there are potentially many more factors involved than in a straightforward stock transaction. With stocks, once you have determined what stock to trade, it really becomes a question of how much to buy or sell and when. With options, the decision is much more complicated because the following factors must be considered: Will you buy (or sell) calls or puts? What strike price(s)? What month(s)? What is your strategy?
Given this level of complexity, there are a few important issues to consider before you choose an on-line broker:
Whether an online broker provides real time option quotes is, perhaps, the most important consideration for even semi-serious option traders. On-line brokerage firms, especially those that specialize in stocks, are sometimes lacking in this critical area. While they might be able to provide real time quotes on individual options, the option chains (the charts showing the bid-ask, volume, and other critical information for all strike prices and expirations) are often not accurate.
With the efficiency of the exchanges and the standardization of the contracts, there is no longer a reason for option traders to pay higher commissions on option trades vs. stock trades; it's no more difficult to execute an options trade than it is to execute a stock trade.
Access to Analytics.
Advanced analytical tools like implied volatilities and deltas are important to serious option traders. However, most traditional brokers do not provide customers access to this nformation. Instead, their customers are forced to trade in the dark.
Choosing an exchange (i. e., BSE or NSE)
When options are traded on multiple exchanges, it's often possible to get a slightly better price on one of the exchanges. While these discrepancies don't last very long, 0.50 or 0.25 can make a significant difference on a large block of trade. However, brokerage firms that make it difficult to execute basic spread orders are even less likely to offer customers a choice as to where their trades are executed. In fact, many customers probably aren't even aware of potential price discrepancies across exchanges. For investors who make larger trades, this can be a significant issue.
Before establishing any position it's important to establish a few guidelines for yourself: Are you trading with money you can afford to lose? Is the position you intend to put on sufficiently small that it won't have a major impact on your portfolio? What is your specific objective for this position? Qual é a sua estratégia de saída? What is your downside risk? Are you trading with money you can afford to lose?
The importance of this cannot be overstressed. If you have already earmarked the money for another use, it is not advisable to invest it in a risky position--even for a short term trade. Every day the market extracts money from people who can't afford to lose it. Don't be one of them.
Is the position you intend to put on sufficiently small that it won't have a major impact on your portfolio?
This is a guideline novice traders routinely violate. Experienced traders caution people against putting on positions that will have devastating results if the market moves the wrong way. Some traders go so far as to say that positions should be so small that putting them on seems almost meaningless. Typically, the percentage of your portfolio associated with this would be 1/2% to 1%. Keep in mind though that this applies to traders more than long-term investors. This is not to say that investors wouldn't benefit from the same advice. They probably would. It's just that a disciplined approach is particularly beneficial to option traders who could easily lose their entire investment.
What is your specific objective for this position? Qual é a sua estratégia de saída?
These issues are inter-related so we will examine them together.
First, whenever you put on a position, it's important to set a price target along with a strategy for what happens when you get there. For example, if you are convinced a particular Internet stock is hugely overvalued (imagine that!) and due for a correction, you might decide to buy a long put either at-the-money or slightly out-of-the-money. If the market behaves as you predict and the price drops, you have to decide how far to let your profits run and at what point to take profits.
If the stock drops 50% and your put is now deep in-the-money, this might be a good time to take profits. On the other hand, if you think the stock is still overvalued, you could buy a slightly out of the money call and let the put ride. For example, if the stock dropped from 250 to 150 and you own the 240 put, you could lock in your profit by buying a 150 call. This way, if the stock goes back up, what you lose in the put will be made up by the call. If the stock continues to drop as you hope, the put will increase in value and the call will expire worthless. Whatever you decide, it's good to have your strategy thought out in advance. This helps to take the emotion out of it.
What is your downside risk?
With option spreads and other advanced strategies, your maximum loss may be more than your initial investment. Before entering into any trade, it's important to know your maximum profit, maximum loss, and break-even. Trading surprises are seldom pleasant.
Modifying and Managing a Position Depending on market conditions, option investors may need to modify their positions either to lock in profits or protect themselves from adverse moves.
Protecting your profits and limiting your losses.
Taking the easiest example, let's imagine you bought a long call and watched with interest as the stock rallied. How can you protect what is now a paper profit? Considering the additional stock commissions involved in exercising the option, we'll disregard this as a strategy and focus on other alternatives. The dilemma whenever a position makes money is when to take profits and when to let profits ride. By selling the call, you lock in profits, but you may miss additional upside. On the other hand, if you sit tight, the stock could pull back below the strike price. In this case, you would lose your additional investment as well as your paper profit. Fortunately, there are other alternatives.
The important point to note is that the riskiest course of action is to do nothing because your initial investment remains at risk along with any paper profits you have generated.
SEVEN MYTHS ABOUT STOCK OPTIONS.
For years, the options market was shrouded in mystery as transactions took place with obscure options dealers who set the prices and terms of options contracts known as Jhota Phatak. The BSE and NSE created "listed options" that became the standard, and option prices were set in an auction market nearly identical to the stock exchanges. For the first time, this allowed the option holder to choose to sell his contract on the open market before it expired.
Trading volume in listed options has exploded in the United States and option trading on more than 1,900 different equities and indices now accounts for the equivalent of 70 million shares of stock trading each day. But many of the myths associated with options have lingered. Unfortunately, these myths have caused many investors to remain on the sidelines while they could be utilizing options profitably or for reducing risk.
90% of Options Expire Worthless.
This "statistic" is often bandied about by those who have no experience trading options. According to the CBOE, about 30% of all options expired worthless -- a far cry from 90%.
Options are Much Riskier Than Stocks or Mutual Funds.
This assumes that the investor is trading options with the same amount of capital that he would devote to stocks or mutual funds. On a "rupee for rupee" basis, options are riskier. Here at STOCKWHIZO Research, we never recommend trading options in this manner. Instead we show our subscribers that options are a cheap way to reduce their overall risk. Como? First, by limiting their total rupee exposure to a fraction of what they would invest in stocks or mutual funds. Second, by diversifying their options portfolio among different underlying equities. And third, by purchasing both call and put options, since put options are profitable when the underlying stock declines in prices.
Option Sellers Make Profits at the Expense of Option Buyers.
Unlike the gambling casino (or the lottery or the race track) which has built-in percentage advantages for the "house," option trading is a "zero sum game" in which option sellers and buyers are always at a standoff in total. Option buying and selling differ only in the distribution of their outcomes, not in their relative profitability. Although option buyers can have more losing than winning trades, they never lose more than their original investment and their profit potential is unlimited. Option sellers profit most of the time but their potential losses are unlimited. STOCKWHIZO has always been dedicated to maximizing profit potential through option buying -- by taking full advantage of the unlimited profit potential and limited risk of this strategy.
Options are Too Complicated.
Nonsense! Anyone who is familiar with stocks can easily learn how to trade options. The approach to option trading that we use at STOCKWHIZO is very simple. If we are bullish on a stock, we advise you to buy a call option on that stock. For a fraction of the underlying stock price, you "rent" any appreciation in the stock above a particular price for a specified time. If we are bearish on a stock, we advise you to buy a put option. Here you "rent" any decline in the underlying stock below a particular price for a specified time. It's that simple!
Stockbrokers Don't Understand Options and are not interested in Options Business.
While this may have been a problem in the beginning, the brokerage landscape will significantly changed for the better. A number of brokerage firms now specialize exclusively in options. Many large brokers will become "option trader friendly." As time passes by with experience. Some traditional full-service firms will developed expertise in options and the desire for options business. While we do not recommend any specific firm, STOCKWHIZO subscribers receive a list of firms that are interested in options business and have the expertise to meet the needs of option traders.
You can't Beat the "Option Pricing Model."
Since options are a "zero-sum game," and option prices are based upon a mathematical "option pricing model," some say it is impossible to profit from buying options in the long run. WE STRONGLY DISAGREE. First, prices for exchange-listed options are set in the marketplace by buyers and sellers, although the computerized pricing models do exert a strong influence. But more importantly, these models are based upon the mistaken assumption that all stock price movement is "random." Clearly, there are always certain stocks that are moving in well-defined price trends, as opposed to moving randomly. If you can identify those stocks whose price trends are likely to continue, you can beat the option pricing model! Much of our research has been devoted to developing indicators to determine stocks that will continue moving in such price trends, so our subscribers can profit from buying undervalued options on these stocks.
Options Trading Requires Too Much Time.
Amateurs are rarely successful trading options because they don't have the time, information, expertise or the discipline to compete in this fast-moving market. But STOCKWHIZO subscribers have a big edge over these amateurs. First, our staff of professionals here at STOCKWHIZO Research have the information and expertise to make you a successful options trader. And second, we give you the disciplined trading rules that help you make big money and also minimize your time commitment to your options trading! We tell you how much to pay, when, and at what price to sell. And you can often leave these instructions with your broker, so your options portfolio can appreciate on "automatic pilot!"
Anyone seriously interested in trading would do well to buy a copy of Jack Schwager's books Market Wizards The New Market Wizards. Through interviews and conversations with America's top traders, Jack extracts the wisdom that separates successful traders from those who, through their trading, simply add to the wealth of successful traders.
Keeping Your Trades Small.
One of the key factors mentioned by almost every good trader is discipline. Discipline, as you might imagine, takes a variety of forms. For beginning traders, one of the toughest challenges is to keep trades small. Believe it or not, more than a few top traders don't allow any one position to account for more than 1% of their total portfolio. Professionals attribute much of their success to managing risk in this way. Limiting Your Losses.
Another aspect of trading that involves discipline is limiting your losses. Here, there isn't a magic formula that works for everyone. Instead, you have to determine your own threshold for pain. Whatever you decide, stick to it. One of the biggest mistakes people make is to take a position with the intention that it be a short-term trade. Then, when the position goes against them, they make a seamless and unprofitable transition from trader to long-term investor. More than a few people have gone broke waiting for the trend to reverse so they could get out at break-even. If you are going to trade, you have to be willing to accept losses--and keep them limited!
Another mistake novice traders make is getting out of profitable positions too quickly. If the position is going well, it isn't healthy to worry about giving it all back. If that's a concern, you might want to liquidate part of the position or use options to lock in your profit. Then, let the rest of it ride.
It isn't uncommon for people to view trading as a fast-paced, exciting endeavor. Fast-paced? Absolutamente. Exciting? Now that's a matter of opinion.
The Importance of Remaining Cool-Tempered.
More than a few traders interviewed in The New Market Wizards emphasize the importance of remaining unemotional and cool-tempered. To these people, trading is a game of strategy that has nothing to do with emotion. Emotion, for these traders, would only cloud their judgment.
In the book Jack talks about one trader who was extremely emotional. Although Jack was able to show him how to be less emotional and more detached, it became quickly apparent didn't enjoy being emotionally unattached. He found it boring. Unfortunately, emotion involvement in trading comes at a high price. Before too long, that trader went broke. The morale of the story is simple: If you insist on being emotionally attached to your trading, be prepared to be physically detached from your money.
Acceptance and Responsibility.
One of the biggest mistakes traders can make is to agonize over mistakes. To beat yourself up for something you wish you hadn't done is truly counterproductive in the long run. Accept what happens, learn from it and move on. For the same reason, it's absolutely crucial to take responsibility for your trades and your mistakes. If you listen to someone else's advice, remember that you, and you alone, are responsible if you act on the advice.
Another Way to View Losses.
Perhaps the most striking example of emotional distance in trading is a reaction to positions that go against thinking to yourself, "Hmmm, look at that." If only we could all be that calm! Of all the emotions we could possibly experience, fear and greed are possibly the two most damaging.
Of all the emotions that can negatively impact your trading, fear may be the worst. According to many of the traders interviewed in The New Market Wizards, trading with scared money is an absolute recipe for disaster. If you live with the constant fear that the position will go against you, you are committing a cardinal sin of trading. Before long, fear will paralyze your every move. Trading opportunities will be lost and losses will mount. To help deal with your fear, keep in mind what fear is.
False Evidence Appearing Real.
The flip side of fear is confidence. This is a quality that all great traders have in abundance. Great traders don't worry about their positions or dwell on short-term losses because they know they will win over the long term. They don't just think they'll win. And they don't just believe they'll win. They KNOW they'll win. It should never bother to lose, because one should always believe that one would make it right back. That's what it takes.
For many traders, sharing opinions and taking a particular stance only magnifies the stress. As a result, they begin to fear being wrong as much as they fear losing money. Although it may be one of the hardest lessons to learn, the ability to change your opinion without changing your opinion of yourself is an especially valuable skill to acquire. If that's too hard to do, the alternative may prove much easier: Don't talk about your trades.
Greed is a particularly ugly word in trading because it is the root cause of more than a few problems. It's greed that often leads traders to take on positions that are too large or too risky. It's greed that causes people to watch once profitable positions get wiped out because they never locked in profits and instead watched the market take it all back.
Part of the remedy for greed is to have, and stick to, a trading plan. If you faithfully set and adjust stop points, you can automate your trading to take the emotion out of the game. For example, let's say you are long the 150 calls in a stock that rises more rapidly than you ever expected. With the stock at 240, the dilemma is fairly obvious. If you sell the calls, you lock in the profit but you eliminate any additional upside potential. Rather than sell the calls, you might buy an equal number of 230 puts. The Rs.90 profit per call that you just locked in will more than offset the cost of the puts. At the same time, you've left yourself open to additional upside profit.
Another strategy successful traders use is to gradually get in and out of positions. In other words, rather than putting on a large trade all at once, buy a few contracts and see how the position behaves. When it's time to get out, you can use the same strategy. Psychologically, the problem people have implementing this strategy is that it takes away the "right" and "wrong" of the decision making process. It's impossible to be completely right or completely wrong using this strategy because, by definition, some of the trades will be put on at a better price than others.
For professional traders especially, instincts often play a crucial role in trading. To truly appreciate this, just close your eyes and imagine making trades in a fast market with dozens if not hundreds of people screaming around you. In this environment, it becomes absolutely essential to maintain a high level of awareness about everything going on around you. Then, to have the confidence to pull the trigger when necessary, you have to trust your instincts. It's absolutely amazing to see how some professional traders, even in a busy market, know exactly who is making what trades. For these traders, expanded awareness is often a necessary prerequisite to fully developing and trusting their instincts.
The same is true for professional traders as well. Watching how markets behave and developing a feel for the price fluctuations is truly time well spent. Unfortunately, in this era of technology, people have become so removed from their natural instincts that many are no longer in touch with their intuition. This is unfortunate because intuition functions as a wonderful inner guidance system for those who know how to use it.
One trader interviewed by Jack Schwager in The New Market Wizards relies so heavily on his intuition that he didn't want his name in the book for fear his clients would be uncomfortable with his strategy and move their money elsewhere. Speaking anonymously, he described in detail how he establishes a rhythm and "gets in sync" with the markets. In this way, he has learned to distinguish between what he "wants to happen" and what he "knows will happen." In his opinion, the intuition knows what will happen. With this knowing, the ideal trade is effortless. If it doesn't feel right, he doesn't do it.
When he doesn't feel in sync with the markets, this trader will paper trade until he feels back in rhythm. But even here, he keeps his ego and emotion out of it. His definition of out of sync is completely quantifiable. Being wrong three times in a row is out of sync. Three mistakes and it's back to the paper trading. Now there's a strategy almost everyone can benefit from.
Trading is a performance-oriented discipline and every great athlete, trader, or Performer will occasionally hit performance blocks. Every Olympic contender trained hard physically, but the difference between the ones who made the Olympic team and those who did not was the emphasis put on mental coaching by the winners. Much of a trader's early education is concentrated on strategies and market analysis. But what are the necessary ingredients for peak performance? What are the tools for both mastering the mental side of the game and busting out of the inevitable slumps that can occur along the way?
First - what is the mindset necessary for peak performance? How does one ultimately get in the groove? There is no better feeling than being in the "flow" - especially with trading. That is what many of us live for and what keeps us in the game, because trading can be a very tough business with long hours. There are several key common ingredients when you are performing your best, no matter what the field.
EXPECT success. It begins initially with your self-talk. Do you get down on yourself when you make a mistake? - or do you say to yourself - next time I will do better because I have great trade management and am a superior trader! Be your own best motivator and believer in yourself. Positive Self Talk leads to positive BELIEFS. If you believe you can do something, you WILL eventually find a way. When you have a positive belief system that the eventual outcome will be OK, then you are more mentally and physically relaxed. You then have better concentration, which leads to smoother execution, which of course leads to peak performance.
Now, on the flip side of the coin, negative self-talk sows seeds of doubt. This lowers self-confidence, which leads to a negative belief system. This then creates anxiety, which leads to disrupted concentration. Now the trader becomes tense and tentative which in turn leads to poor performance. Talk about a vicious cycle!
SECRETS OF TOP TRADING PERFORMANCE.
KEY INGREDIENTS TO PERFORMING YOUR BEST.
You must be passionate about what you are doing and having fun. Passion first, then performance.
Top performance comes from having a high degree of confidence. You must have the confidence that you can take control and face adversity. You must also be confident that you will have a favorable outcome over time.
Peak performance comes from exceptional CONCENTRATION. You must concentrate on the process, though, not the outcome. A sprinter who is in the lead is thinking about the wind on their face, how relaxed their arms are, feeling the perfect stride they are totally in the moment. The person who does NOT have the edge is thinking, "Oh, that runner is pulling ahead of me I don't know if I have enough wind to catch the leader " They are tense and tight because they are thinking about the outcome, not the process.
Great performances come from being able to rebound quickly and forget about mistakes.
Great performance comes from pushing yourself and trying to overcome limitations. Staying in the safe zone becomes a monkey on your back. Challenge yourself to take that hard trade. Manage it. If it does not work out, so what your risk was limited and you can pat yourself on the back for taking the hard trade in the first place.
Great performance comes from turning off the brain and becoming automatic. This is being in the Zone in the groove. You can't overanalyze the markets during the trading day.
When you are relaxed, your reflexes and timing are superior because you are loose.
There are some concrete tools to break the cycle and bust out of the slump? The number one tool for starters is POSITIVE SELF TALK. We all talk to ourselves in our own head. Be aware of the things you are saying to yourself. The written word is also a powerful tool. Read affirmations and books on positive thinking. Norman Vincent Peale, Napoleon Hill . Arnold Schwarzenagger's autobiography are a few. Richard Marcinko wrote a book called the Rogue Warrior. He talked about the Will to WIN and the belief that ANY circumstances could be overcome. This is a great inspirational book for traders. Next - act like you are already where you want to be. Assume the mannerisms, posture and talk of a top trader. In addition to self-talk and reading written words, develop mental pictures. Visualize what you are going to do with your wealth or how it is that you want to live. Think of the power that money would give you to start any organization you want or to make other people's lives better. Visualize your dream house. Program your subconscious as though you are already there. Dare to dream.
OK - talk, words and pictures what is next? Look at your environment that you have surrounded yourself with. Your success in trading will also be a product of your environment and I am not just talking about office space. Look at the people you surround yourself with. Do they support your activities? Surround yourself with people who believe in you, who smile, and who are enthusiastic in anything they try or do. The top Olympic athletes had friends and family cheering them on every step of the way.
BE PREPARED FOR A SURPRISE EVERYDAY!
All of the above factors deal with external factors and internal belief systems. Now let's get down to the DOING part! Every trader should be prepared before the markets open because they already did their homework - right?! One of the most impressive points in the Rogue Warrior book was this veteran navy seal's obsession for being totally prepared for Mr. Murphy! There was always a backup plan for everything and this is what kept him alive. Prepare your daily game plan by looking for both new setups and preparing strategies for managing existing positions.
So, assuming that you have done your daily homework as a trader, the next step is to learn how to get into the groove. There is no better tool for this than having routines and rituals. Pre-market rituals help calm the nerves, get you into a rhythm, and also help to turn off the logical part of your brain - the part that wants to overanalyze everything. If you have a chattering monkey sitting behind your ear, routines and rituals are one of the best things to shut that monkey up. Maybe there is an opening sequence of tasks you do before the market opens. Perhaps in the middle of the day you draw swing charts or take periodic readings of the market's action. Maybe you keep a journal and make notes to yourself. At the end of the day, what type of record keeping do you do for your trading activity? What do you do to unwind? Salesmen are taught to do small rituals before cold calling clients. It controls the anxieties and fears of rejection. Cricket opening Batsmen have a pre-warm up ritual. It calms their minds and puts their body on the autopilot mode. It keeps them involved in the PROCESS and not thinking about the outcome. One of the more common rituals on the trading floors was to wear the same disgusting lucky tie every day. If the mind BELIEVED that the tie was lucky, this was all the traders needed to keep the long term odds in their favor.
Here is another helpful factor: A healthy body keeps a healthy mind. EXERCISE! This gets oxygen to the brain and keeps the blood flowing. How can you expect to be a peak performer when you are eating junk food and going through insulin swings? Or perhaps you drank too much wine the night before or are jittery from drinking too much coffee. How can you concentrate well if you are not getting a full decent night's sleep? Sure, most of these are minor factors but they can all add up to major bumps in your performance. One moment of sloppiness can lead to forgetting to place stops or letting a bad trade go too long. Then when damage is done, your confidence gets chipped away. You must treat your confidence level as something to be protected. Good habits will keep your confidence level high. Once you have good habits, it will allow you to increase your trading size.
If you want to push yourself to the next level in your trading and are wondering how to increase your size, you MUST have a foundation of good habits. If you are running into a mental block in this area, it is your subconscious's way of telling you that either you have not done adequate preparation or you are not satisfied with your money management habits.
There is one more extremely important thing that contributes to your success and that is GOAL SETTING. When you set your goals, they must be concrete and measurable. You must also break them down into bite size pieces. Perhaps your larger goal is to make 8 digits over the next three years, but how do you get there? Put together a more detailed business plan that is NOT Rupee oriented but will help you eventually reach your Rupee-oriented goal. Maybe it includes how many trades you should make per week, how much time you should devote each evening to preparation and studying charts, and plans for controlling risk. Both short term and long term goals help achieve peak performance.
You must also have concrete ways to measure those goals. Top cricketers know the splits that they run. They know if they are ON or OFF according to how practice goes. They know their unforced error percentage, their personal best, and their competition's stats. The same should apply to you in your trading. Know your weekly win/loss ratios, your trade frequency, and the average amount of profit or loss each month. Only by having something to measure can you tell if you are improving or not and moving closer to your goal!
The battleground isn't the markets but what's within you. The more you talk with other traders, the more you realize that everyone goes through various common experiences. Everyone makes many of the same classic mistakes. But what distinguishes the ones who can ultimately overcome them?
Remember that ATTITUDE is everything. How you frame out an individual experience or event will affect your success in the long run. Do you see a trading loss or bad drawdown period as a major setback, or do you see it as a learning experience from which you can figure out how to be on the RIGHT side of a trade instead of the wrong side the next time around. Many great traders use periods after drawdowns to go back to the drawing board. Some of the best systems and trading ideas have come after periods of adversity. What incentive is there to learn and improve ourselves when everything is smooth sailing and we are fat and happy? But when times are tough, that is when we can rise to the occasion and prove that we can overcome any obstacle set down in our path. So many great athletes have been able to come from behind when they are down because they have learned how to seize that one opening or opportunity and CONVERT. They latch on to the tiniest shift in momentum and milk it for all it is worth. Latch on to that next winning trade and convert. The first small moral victory is the first step towards reaching the top of Mt. Everest. And if you keep making small steady steps, you will eventually reach the top. Sometimes for a trader, the greatest feeling in the world can be making back those losses, no matter how long it takes, because once you have done that, you realize you can do anything.
The most successful players are the ones who have a burning desire to win.
Don't check out of the game. Never give up!
Improve your consistency. Stay active, stay involved, and keep your feet moving.
Seja paciente. Do not force a trade that isn't there. Wait for the play to set up.
When you get a good trade, go for it. Manage it. Trail a stop. Don't be too eager to get out.
Be flexible - if what you are doing isn't working, change what you are doing!
When down, get a little rhythm and confidence going. Don't worry about being too ambitious.
Stay with your game. Don't let outside distractions bother you. They take energy and break your concentration.
Match your particular strengths to the type of market conditions.
Hate making stupid mistakes and unforced errors. This includes not getting out of a bad trade when you know you are wrong.
Many players will play their best game when they are coming from behind.
Copyright 2001 by Hiten Jhaveri, StockWhizo Investments. Todos os direitos reservados no mundo inteiro.