Options Trading Tutorial

How do I make money in OPTION trading in Stock Market?

Public Comments

1. Option trading need more education, in NSE there is a derivative module exam for basic in Derivative then learn "Black-Scholes Option" it is freely available on the net http://www.leavittbrothers.com/education/option_strategies and read many more about option. Option is a hope business.
2. Options are a highly versatile asset class and provide the educated investor or trader with many opportunities. However, you can lose money...that is lots of it and fast! If you are new to this, please do two things before you make any trades. One, educate yourself about options. You can find many good books and websites to advance your education. One to check out is http://www.safe-options-trading-income.com. Two, practice some trades by "paper trading" with fake money; you do everything just like making a real trade except put down your trading capital. Track you profits and losses and learn from that experience.
3. Options are like Ice Cream, they melt if you don't eat them. And Time is the most important point while doing Option Trades. 3 Things have to be particularly accurate if one needs to make money with options - 1) Direction of the move 2) Quantum of the move and 3) Time to be taken for the move, if you are right with these 3, you have the best odds of winning at options. There are two ways one can make money with options - Either you buy an option and sell to make profit later or you sell one short and then buy later. Anything you do, always remember if you are an option buyer the time must be on your side, if the stock doesn't move quickly towards your desired move you have a bright chance of losing. But if you are an option writer and the stock is not moving, that is the best thing that can happen to your position.
4. By maximising your chances of winning and minimizing your chances of losing. You can do that in options trading by using options strategies that profit in more than one direction. For example, the straddle allows you to profit no matter if a stock moves upwards OR downwards and an Iron Condor allows you to profit no matter what the stock does as long as its not too strong a move. For a comprehensive list of options strategies, refer to the link below: