So this is going to be a very important series for you guys. Reason being that if you are interested in options, then I can say that the blogs you are going to get in the coming days You will get to learn options in the simplest form on the internet till now. Because options are very close to my heart.
The biggest thing is that most people make losses in it. In fact, it’s my view, everyone has made losses. But what did we learn from those losses? What did we improve? Ultimately, what system, what set up, what strategies are being used to make money continuously? You will enjoy learning.
But one thing is for many people, if you have come with the hope that you will learn options, you have seen a post on Instagram, millions and crores of rupees will come. In fact, I met a person today and said that I have to earn crores from the stock market. I said that you will have to invest crores.
So, what I mean to say is that if you expect that it will come in a day, you will make a lot of money, so I don’t have anything like that. But yes, what I have is a systematic approach. You understand what options are and if you understand this, then money will be made. But if you don’t understand this, then you will use this system against yourself and you will lose money.
So what is my prime objective of making this bllog or making this series? My prime objective is that money will be made, it will be made today or tomorrow, but your losses will be protected. The ideology with which you are working today, you should understand a little bit. So, people want to trade in options.
They see that there is an option of 2 rupees, there is an option of 200, there is an option of 100, there is an option of 1000.I mean, you see all these things. Now, there will be many people who have interest in basics, that what are they talking about, so we will talk about charts, we will talk about strategies, we will talk about price action, we will do everything.
For a layman, it is important to understand the basics first, where he is attracted by seeing C and Pahe is confused, he loses money, he does everything. So this is simply C means call option, P means put option. Most of the buyers, most of the people are buyers, they only know that we have to buy when we feel that the market will increase, then we will buy call, when we feel that the market will fall, then we will buy put.
Okay, you guys do this too, but still options are so volatile that people actually lose money. You guys lose money, the reason for that is very simple, everyone knows this, but I am still telling you that whenever you are buying, so these options are like ice cubes, so if you put that ice cube on the pan, it will melt. Now I am giving you this example
for example, the market is at 18000 now. When you are watching this blog, you may be watching it after5 years, it may reach 50,000, but it is an example. So wherever the market is at that time, we call it at the money.
So you bought the call of at the money or you bought the put. If the market does not move from here, then whatever the premium will be, it will end. It is important for the market to move, and you also know that the seller has an advantage, you will understand what that advantage is.
One second, let’s clear it a little bit because we are taking it from the basics. We are not going fast. Explain what is at the money, in the money, out of the money. I will do it. So here this is our ATM, let’s take the ITM, let’s take the OTM, let’s explain it, no problem. We are coming back a slide, out of the money. So would you like to say, I will say. You say, absolutely. So what do you have to understand to understand this, I will take a very simple concept.
So there is a market at 18000, when we are talking about the call option, we are talking about increasing. From where the market has already increased, for example, the market has already increased from 17000, it has come up from there, then it will be in the money automatically for call option.
And as far as the market has not reached, for example, take 18000, 500, or take 19000, then take the difference of 100000, so if it is 180000, 100, 200, 500, or 19000, it will be out of the money for call option. But for put option, it will be the opposite. Why will it be the opposite? We are talking about falling. When we are talking about falling, then from where the market has already fallen, then the market has already fallen from 19000, for example, it has come up to 18000, then what will happen to 19000, it will become an ITM.
And as far as the market has not fallen, for example, you are taking the trend of falling, you feel that it will fall more, then how much will it fall, you feel that it will fall up to17000, then it will become out of the money. So this is basically the concept of out of the money, at the money, in the money. But what I have to explain now is an even more important aspect.
So here if I give you one more trick to find out, if you just want to find out and you are a beginner, then in the money means the first day you will get money, then it will be in the money. Now the market is running at 18000, in call option you think that you are getting the opportunity to buy at 17000, so on the first day you are in a profit of 1000 rupees, so here 17000 has become in the money for you.
If we talk about put, then if the market is running at 18000and you have the option that you can sell your products, that is, you can sell your nifty at 19000, then 19000 has become in the money for you, because on the first day you are getting a profit of 1000 rupees, so on the first day you are getting profit in the in the money, out of the money, you are trying to work outside where you are standing. Let’s move forward.
So, a very simple thing for people is to understand the add the money, in the money and OTM, one more thing to see is that out of the money options will always be cheap, and here the in the money options will always be expensive.
Now, in add the money and out of the money, whatever premium you pay, there is no intrinsic value in it, so this means to understand, this concept I had to explain to you, that if you are paying any premium, we come back to our example,
that for example, the market is at 18000,and whether it is CE or PE of 18000,you are paying any amount for it, for example, let’s take the example of 100 rupees, now we are talking about nifty, and the example is of 100 rupees, so both these 100 rupees are going to be 0,if the market does not move from here,
so I said that the seller has an advantage, see if anything is sold in the market, so what is the stock market, the stock market is a place where the buyer and seller meet, you get the exchange, so if you are getting here, someone bought this option, someone has also sold this option, the one who sold it has an added advantage, that if you get weekly expiry in nifty, you can trade according to every week,
you get monthly expiry in stocks, today when I am making the blog, it is still there, tomorrow if the daily expiry starts, then anything can happen, okay, so I am giving an example, like in the US market, there is a daily expiry, so here if the market reaches even at 18100,then you will not get a rupee, if you are a buyer
, what do you want, when you bought from the first day, see if you are doing for a short term, then you want that if it will be 140,then I will sell it, that can be done in a day, that can be done in a good move, but many Greeks work on it, so we are keeping it a little fast, because I am assuming that you know the basics, so now what is my point,
I am trying to explain to you the questions, that first of all there is a buyer, and there is a seller, who is in the advantage from the beginning, that is the seller, because first of all, he got this 100 rupees, he got the added advantage of 100 rupees, for you the breakeven is 18100,there will be profit above that, if the market goes to 18101,
only then you are going to make something, otherwise you will not get anything, if the market stops at 18000,everything is finished there, so you have to understand that the seller has an added advantage, that added advantage is that if the market does not move, then 100 rupees gets less day by day, so like this ice cube was melting,
I gave you the example of ice cube, so we call it theta decay, if you understood the concept up to here, then even if you did not understand, you can listen to it again on repeat, because it is important to understand this much, because what I am going to talk about next, will be above this, we have talked about this very basic, what is call put, what is in the money, what is out of the money, in the money you always get an intrinsic value,
because you are already in profit, in the money means you are already in profit, as much as you are in profit, that intrinsic value of yours is already there, above that the value of the normal option, that will be there, you have understood it completely, so now why are you watching this blog, you want to make money, there is no other reason, you are taking out your time, you are taking out your precious time, so now we are going to explain here.
how to make money with options, okay, so now we will start with it, so here if you understand this basic concept, then come to the next step, now what is the next step, that you can earn money in options in many ways, before understanding the first option, you will have to understand, what can happen in the market,
so I have here, I have the first one, that the market of the scenario goes up, second I have the scenario, that the market goes down, and third I have the scenario, that the market stays sideways, what is more important than this, one thing more important than these three, that how much the market goes up,
how much the market goes down, and if the market is range bound, then how much is it range bound, now how much range to take out, we will definitely understand in the coming blogs, that if the market goes up, then how far will it go, so in resistance, support, options, price action plays a very important role, price action plays a very important role, now we will understand option chain analysis,
so there is so much to learn, means you are saying, if someone watches this series, he will get a 360 degree view, and will understand everything, I am not an expert, but I know that the beginners, who want to understand how money is made, and as much as I understand, I will understand, so now I have three scenarios, I will tell you an important thing.
Every person who will talk about options will say that your view is bullish. How? What makes your view bullish? So you will tell that too. How do you know? How do you know? Why do you think? I say this dialogue. You can write it. It is a very good dialogue.
If you invest or trade only on the feeling, then the market will put you. What are you feeling that the market will go up? Explain this to me. Tell me the formula. Tell me a process. Tell me a process. Why do you feel that the market will go up?
So far people were trading on the feeling. I had a dream last night. Bali came last night. He told that today it is going to go up. There are many people like this. I am seeing that people have come to the market after breaking. No comments. Let’s go on topic.
So, what is happening with that? People also start trading with the same mindset. Problem is that you should have some logics behind. If I am investing money, what am I investing money on? I can’t invest on the feeling. So, this is my first scenario. I said one important thing in this. First thing is my view is bullish. Then why is my view bullish?
So I am writing here. My view is bullish. We will talk about all these. Second is why is my view bullish? Why do I feel that the market is bullish? What did I see? So, we will talk about what can be seen for that. And third most important thing is how far is the reach. Because according to this, after clarity of these three things, you will be able to take an accurate trade.
I mean I feel so. So, third thing, sorry, second thing is the same parameter here. If I am bearish, then in bearish also it is the same thing. Wham I bearish? And third scenario is that how far do I feel the market will reach? And third scenario is sideways. Now, say sideways or range bound, what actually happens is, you understand, will the market just keep running?
Or will the market just keep falling? It will also do some fun. It will also make people dance. Now, I was listening to an expert today, Annand is also with mesa, he said that the stock market is designed so that most people can take most of the money. Now, as a common man hears, he thinks that I came to earn.
But as soon as he hears the expert, he is convinced that most people are coming to take most of the money in the market. So, you see that when I trade, till I am not trading, I am seeing, then the market is running according to mean as soon as I take the trade, now I have taken the call, Theni think that I should have taken put in the market.
I lost. I took put, the market goes up from there. Or we are still talking about options, it is the same in stocks. It starts falling from where we take. So, this scenario, if you master it, you will earn money. And you know what is the point? You take the 10-year, 15-year, 20-year analysis of the market,75% of the time the market remains in this range.
It is running at 25%, but if you do not understand this 75% of the time, then you will not be able to earn money. Because when the actual opportunity to earn money will come, then you will be so tired that the market has troubled you so much that this time also it is a fake signal. And you will not be able to catch the real signal.
So, it is very important to understand this. So, this signal, which Annand also said that 75% of the time the market is sideways, people do not understand this. They are taking this trade in this market and they are taking this trade in this market. So, it is important for you to understand the market, it is important to understand the scenario of the market and it is also important to understand the range of the market.
So, my first important thing comes here, which I will start from the starting. I mean, people talk about this thing for a long time, but I am talking very fast. Maybe I am going a little fast, but if you want to learn, Theni will teach you like this. So, now it is important to understand the market for this bullish, why and where.
I am talking about explaining the range of the market and for that, a very simple thing is given to us and it is called option chain. You cannot ignore option chain. You cannot ignore it if you are trading in options. Whether you are selling, buying, you have to just have a look at the option chain before you make any view, any opinion.
So, now we come to the option chain analysis a little. Now we have talked about option chain analysis before, you must have learned it, but still it is my duty. I will tell you a little, explain it to you, so I will show you.
So, you will go to NSE, you will search for option chain, you can write option chain on Google, you will get it, there is one important thing in the option chain, sir. People write option chain, it opens directly, nifty opens, what is important in this, expiry.
Which expiry? Today when we make a blog, we have an expiry in front of us,23rd February, after that you are seeing 2 March, 9 March, 16 March, 23 March, which expiry? So what do you know from this, let’s talk about the current expiry.
Now we come to the current expiry and see one important thing which you cannot ignore. So we know that this cream will be all yellow, so it will beIndamani, it is all white, if you say it will be coach, then it will be out of the money, same for production.
So here are the call options, now what I have to see, if the market is almost 18000, Indamine is around 18000, then I have to see where the maximum OI is standing. Now if you see here, then 235000 quantities is standing here, means here the market is going to get a strong resistance. See if you sell the options, buying is very easy, there is adoption of 100 rupees, you are getting 50 quantities in 1 lot, 50into 100, you can become a buyer in 5000 rupees.
But if you go to sell there, your mother will say that you have spent 1 lakh rupees, so when you are going to sell, you are getting1 lakh rupees for 1 lot. Here when you see such a big quantity, you are understanding that a lot of money is invested here, so who has invested money, the seller has invested money, who is the seller?
The seller is the one who has money, retailers can also be sellers, but if someone is selling in such a big quantity, then they are not normal people. They know about the market more than you and me, we are also retailers, you are also a retailer, but we know that the bagman who is sitting with a lot of money, you have to see which strike price he is sitting on.
And the second important thing is when he is running with his lungi. This is an advanced concept that if the position starts to decrease from here and it goes to some other strike price, then the market is also going to go there.
So it is very important to take a view from this, so for me, I got to know from the call option that now the resistance of18000 is standing for the market. Now it will be difficult to cross the market to 18000, if the market goes to 18000, 30, 40, 50, then a reversal can come from there.
And if you get a price action there, that is a bang on trade, that is a bang on trade, because you know that the sellers are sitting, they will try to bring down the market. But first they will also attract, who will buy, who will buy, who will buy, you will buy by going to 18000, 10, 20, 30, this is a break out.
And they will come to the break out and hit you, they will bring down the market from there because the resistance is standing here, how can I ignore it. If I had seen more OI here, I would have seen it at 18000, 100, then I would have said that no, the maximum sellers are standing there, now the market can go from here.
But now they are standing here, so I will get a resistance from here, and if you are talking now, the market is closed. If I show you the previous day chart, then you will see that whenever the market, I can say without seeing, whenever the market will go above 18000, then a pressure will come from there to bring down the market.
It will come, it is natural, how do you know that, just by looking at the simple thing, similarly if I look at the put side, then where is the maximum OI, look at the nearest, now I am seeing it at 18000.So at 18000, there is 1,38,000 quantities, what does it mean, it means that the market is range bound, there is no range, maximum call option is here, maximum OI is at 18000, put is also there, market is a little range bound.
But where is the maximum quantity, who will not let the loss be more, there is more quantity at 18000, so if the market goes above 18000, then there will be more loss. So if the market goes above 18000, then there will be more loss, it means that it will not go above 18000.Or there can be an interesting perspective in this, if 18000becomes 100, then you will get the momentum of the next 200 points very soon.
Because then they will come to catch it, so this can be a big make or break game for you. So the game of make or break, there you have to check the change in OI, and there you have to check the volume also.
Here one important thing is volume, you have to see at which strike price maximum volume is being made, now Annand talks a lot on volume, Annand is an expert on volume, but you have to check the volume.
Here the maximum volume is at 18000, as soon as their planning starts at any other strike price, the volume will come there. And if the volume is seen, then you cannot ignore it, you cannot be blind in that thing, that volume is coming, but no, I am feeling that it will not go. So what is it like, when they said that if the volume comes, then a very good momentum can also come.
So with this momentum, if you see any trading signals, you can definitely enter, but what is seen now, I am seeing here, I am seeing there, and what I am seeing is that this is a range forth market. It will try to keep around 18000, but not above 18000. For example, let’s see the second one, so the second one is getting support at 17800.
So now I am seeing a range for the market, for now, that the market will be between 17800 to 18000. So this range, what I told you first that we will understand range. I am bearish, I am bullish, I am anything. If I see a market of Rs.17800, then I will understand that I don’t want to leave the trade above here. I don’t want to leave the trade above here.
With setup, with price action, with a lot of things, how will that trade be confirmed? You can’t just see that we didn’t invest money by looking at one thing. You see multiple parameters. You see one thing and decide whether the boy or girl decides to get married. There are at least 11 parameters. Annand knows more. You are also married, but you had a love marriage, I had an arranged marriage, so generally know more.
You know more. CA, CF, NLB are useless after 3 days. That’s why they got arranged. This is a very important day. Sir, you can at least verify this if I am doing something wrong. So I have CA, so this is a very good thing. Anyway, let’s go. So we need to find a range.
Thesis not the only parameter to get the range. First of all, this is a first impression. We are going from the beginner level. You got the view of a hawk. Once you have seen from above that what range is being made, now let’s move forward. Now let’s move forward. Now how will I know that it is bullish? I definitely found out the range.
After that, how will I know why bullish? Why bullish? If the market is so important that it will go up to 18000, it is not important. It is not written anywhere that it will go up to18000, I will get 200 points. It is not important. So how you will get to know about it, we will just talk about that also.
And then how far will it reach? Now it is like this, you understand. If someone knows these three things before, the market is going to increase. Okay, so let’s talk about something else. Someone told me. You got to know that it was published in a magazine, in an astrology segment that it will go up today.
And then you got to know that it will go up to 500 points. And after that you got to know that it will go up today. Then it will be silver. Then we will sell the house and put into people.