The opposite is that you can sell it first and buy it later. Now how do you do intraday? what we are talking about today is that you can not only earn money through intraday, you can also earn money by trading in options. Now how is traded one? What is option trading? If the volatility is high, then it affects the IV and if it affects the IV, then the premium of options increases.
So if we are just buying options, then if it affects the IV after buying, then the premium of our options will increase, which will be beneficial and the seller will be at a loss. But sellers do not make their losses. So why don’t they do it? Because they already increase the premium. When the premium looks increased, then you may not have much understanding about all these things about option Greeks. Again, blog has been made on option Greeks. You can go and understand about option Greeks.
But now we are talking that through options, you can earn money in every market. This is the main topic of this blog that there is a war, then what will you do? You feel that your investment is suffering, but you want to earn money from the stock market. It could be a right opportunity. Now, whether bull run is going on in every market, whether the bear run is going on, whether the markets consolidating, sideways is going on. If you have learned the strategies of options, then you will earn money from this market.
And we have made a series on options strategies. You can also go and see that, from which you will get to learn the strategy of options. But one strategy that I have not told in that playlists that you can make straddle and strangle in options. If you can see that there Isa war like situation, that means there is a lot of volatility. The market can increase a lot; it can fall a lot.
If you feel that the market can increase a lot, it can fall, anything can happen in the market, then what to do at this time. Now I tell you a big thing that am telling you the strategy. Many people consider it as a lottery ticket. That this is the lottery of the stock market. Because through the lottery, what happens to you, how much is the lottery of 100, 200,1000, 2000 rupees and through that how much money can we live, lakhs, crores of rupees. So if we can make a small investment and earn a lot of money, then today I am going to tell you such a strategy.
Now let’s talk about this strategy. First of all, I am going to give you a strategy that is called long straddle and long straddle will tell you now. There is another strategy that is cheaper than long straddle. It will be cheaper. Money can be made in the market and that is long straddle. Now what is this, how is it made, how does it look, I am going to show you everything.
Let’s first understand what straddle and strangle are, what is this, what is the name, now you will know the basics of options. I am assuming that if you have been following me for so long, then now you will be clear about the basics of options that there is a call option, there is a put option.
If we feel that the market will increase, then we can buy the call option and if we feel that the market will fall, then we can sell the call option. So you can buy and sell both the options. If you feel that the market will fall, then you can buy the put option and if you feel that the market will increase, then you can sell the put option, then you can earn money from it. Now this basic understanding is clear to you. Now let’s understand what is straddle and strangle.
What do you have to do for straddle and strangle, first we understand straddle. Straddle says that if you are trading in the index or you are trading in a stock, now it is possible that you are trading in Bank Nifty or Nifty, then you have to trade in the index and if you are trading in a particular stock, then what is the rule of straddle, that you are at the money option, at the money, what is at the money, for example, Nifty is running at 16,500, so what happened to 16,500, it is at the money. If we talk about 16,200, then what happened, it is in the money. What happened to 16,700, it is out of the money.
Now what is at the money, simple, at the money is 16,500 because Nifty is running at 16,500. At the money, we will buy both the call and put option. If we buy both the call and put option, executed at the same time, then what will happen, we will make a long straddle, this is a position that you are going to make in the market. This is a strategy that you are making, but when will this strategy work, it will work only when you feel that anything can happen in the market.
The market can grow a lot from here or it can break a lot. I will show you how much on the computer screen. The second strategy is that you can make strangle. For strangle, you are out of the money. The example gave, this is in the money and out of the money, this was given for call, for C.E.Os. it is different for PE, I will tell you why it is different. Out of the money, if you are doing both the call and put option, if you are doing long, long means buying, we can also make this same strategy short instead of long, but it will not be in the volatility market, it will be a strategy for the sideways market.
I hope you are understanding, you must be feeling that it is going a little fast, if it is going fast, then you can see the playlist of option trading from the starting. No problem, now here we are going to buy out of the money options because we are doing long. What is the benefit of buying out of the money? If we look at the add the money, then we get a little expensive options comparatively out of the money. The premium of out of the money will be even less. If the premium of add the money will be 100 rupees, then the more we go out of the money, the cheaper it will be.
90 rupees80 rupees will be cheaper than that. It may come at 20 rupees, depending on how much out of the money we are. So here if we come to out of the money, here you bought and sold and if we are talking about one option, here was an option of 100 rupees, here was an option of 100 rupees.
You know that you have to trade in lots, so your 200 rupees multiplied by the lotus how much, so your200 rupees multiplied by the lot and if you assume that here is 20 rupees, then 40 rupees multiplied by the lot and 40 rupees multiplied by the lot, let’s say your 25 rupees or 50rupees lot, according to that your money is being spent, so this money is very less.
There your money is also a little more comparatively, so straddles cheaper, straddle is expensive. We will also understand the risk to reward ratio here. will understand when you can apply straddle and strangle and especially in a warlike situation, you can make money. Now one more thing, when you make straddle and strangle, the order should be executed at the same time and long strangle and long strangle. Now we will go to the computer screen and we will make you see how the strategies work and how you can make strategies. So here we go.
So before we discuss about the strategies, I am going to tell you a very bold and first move of the industry, which is taken by Dan App, whose name is Dan Lakshmi. This is to uplift women to trade and invest, their financial awareness should increase. They have clearly turned off 50% of all charges for women on their Dan App. So if you are a female, you are a lady, then you can start trading and investing on Dhan App and you will get 50%off on all types of charges. In fact, if you have an accounting any other app, then you can also go and trade on Dhan because this offer is specially taken for women empowerment on Women’s Day.
Very special offer and you can avail this. So we have logged in to our Dhan account. Today our view was that the market will be very volatile and you can also see that if we see Nifty here, then Nifty is also getting corrected here. Now the market is falling from here. Now from here, you can have many views, but now we are teaching you to make straddle and strangle, that too long.
So first your view should be correct. If your view is correct, then you will take this trade. If you feel that your view is not correct, then you will not take the trade because whenever you go and long in any strategy, you buy, then when you are buying, you get theta short. As time passes, your premium will decrease.
So today when I am trading on Friday, so theta does not have much effect, but if you do it on Wednesday or Thursday, execute this strategy, then theta goes down very fast. Now if we see here, so the Nifty is running around 16,300. So at the money it will be 16,300. Now if we are going to make straddle here, then what you have to do is you go directly to the market, you go to options, you can buy and sell from here or you can come here on orders.
I have given the name of the baskets after that you can make baskets you can give the name by clicking create basket now see inside this basket, because I am making long straddles straddle I have told you that it will be add the money so our name is correct, we have kept the name here we will add the script here now script is nifty16300we have called and put option is to be added here we have added 16000 nifty in the script we have to see how many lot we have to take we are making this blog for educational purposes we will take one lot and we will execute it on the market
we have not executed the order yet we have just put it in the basket, the difference is that the order is executed at the same time when you are making a special option strategy so you have to execute many orders at the same times it is a good option to make a strategy again we will add a put option here we will keep it on the market now see we have added it now when I click on execute all orders, both orders will be executed at the same time you see on add the money,
because nifty is around 16300so the premium price is also very similar means there is not much difference if nifty will run up and down, then there will be a differences we have executed the first basket and I will show you the second basket which is making a long strangle in strangle we will take out of the money options now it is 16300so if I say 16100 and take put option then this put option will be out of the money option will add it in front of you will also add to the basket we are taking a difference of 200 points
if I take call option here, then it will be out of the money will add to the basket again if it will run around 16300then there will not be much difference in premiums now we have made our baskets if I want to execute the order,
I will simply click on execute all orders because I have already put it in the markets my order will be executed in the market will also execute a straddle in front of you we had a straddle here, I will click on execute all orders you don’t have to do this, you can use one of these strategies have just shown you now when will I get profit and loss my loss will be if the market does not move from here if the market will be sideways, then I will get loss because if it will be sideways, then theta will be short and theta decay will happen, and if theta decay will happen then I will lose, but if the market shows volatility because our view should be correct then I can get a lot of profit here
so I will show you the positions in open positions that what positions we have taken here I am getting profit in put options, I am getting loss in call options why I am getting loss in call options because nifty is falling from here if the market will keep falling, then it is okay because I will get profit in put options but what will happen when the market will fall a lot our view is that the market will be volatile so definitely we can get profit here, but if the market stays sideways then we will get loss here now what you have understood is that there are a lot of strategies in options have told you two strategies here these strategies only you can use when you feel that the markets very volatile
now when you made a basket here it was telling you how much money you were needing to execute that order now we have completed it, but I am showing you an example what we have completed here you can see LTP and prices here you can see if I reset it again so as soon as we reset it, here you can see the fund requirement if I want to make a strangle then I should have this much funds okay we are doing this on Friday but I am telling you that the fund requirement will be more because as soon as we come near the expiry we have taken both options of Thursday expiry so as soon as we come near the expiry,
our premium will be less our fund requirement will be less now you are getting a lot of features in money, one is the feature of watch list you can see 10001000 stocks at a time because here you can make multiple watch list and in each watch list you can add 1000your stocks so here you can do easily if you want to add money so here you can add money for investing now you can see our positions are lives I will show you my positions if we go to positions so for now we are getting a loss,
when will we get a profits I told you when will we get a profit when the market moves from here so we can wait, it is not a big deal because we are waiting for 400-500 rupees but this can be a loss why it can be a loss because if the market is stable then it will be a loss because I have told you the benefit that you can make baskets in the coming time we will learn to make butterfly
we have to execute the orders so to execute the orders when we have to place the orders basket orders are very good here you can get option chain analysis easily if you see the home screen you can see all the indices which are here all are together, today the whole market is broken so we don’t have any problem with that, why?
Because when will you get the benefit if the market falls in options, if your view is correct then you will make money if you are doing investment then you can get a loss because if the market is falling but option traders can make money in all types of markets if you are on the home screen you can click on options you can see the most active options you can buy and sell directly you will come to trading view you can see multiple screens you don’t have to take the paid feature because you can apply multiple indicators you can do daily Spin ETFs and ETFs you can choose daily SIP
for example, if you want to do in Tyco can go to Tyco can click on start SIP and you can choose for daily SIP feature also and the IPO’s you want to apply the upcoming IPO’s you can see here, you can apply for IPO in one taps there are a lot of features of them but we are getting profit here you can expect how much profit you want after that profit, you can exit from any strategy you can cut your positions anytime here you have learned straddle and strangle but there are other strategies you can learn strategies of options and you will get to know that there are other strategies which you can use and the things you have learned won’t say you can start investing from today
first I will say you to do paper trade when you see profit from paper trading then you can start investing so what you are learning in today’s date this is really very valuable information because most of the people do trading in naked options they don’t know that by using strategies in options think the market can be more volatile it can fall, so the profits here can be more so we will wait for a while but if you want to get out with a little profit, you can do that now it is up to you what you are going to do my suggestion is that you do paper trade then you trade with real money and learn and earn more money now
let’s understand one more thing that what is our maximum loss maximum loss is when if the market is sideways then see premium can be 0 till expiry if the market is where it is then our premium can be 0 but our view is that market will move and move a lot now you must be thinking that if it moves a lot, if it falls lot then our call option will be almost 0 or very less so no problem, call option will be loss but you think in put option there can be unlimited profit the more the market will fall, the more put option will give profit so the profit may come to you 10,000, 20,000, 50,000because if the market falls, you can earn a lot of money in one lot now
we have taken one lot if you remembers we have shown you according to one lot if the market increases a lot, then put option will be less but call option will increase so here straddle and strangle in both cases because you executed the order together now the market runs in any direction you just have to see that the market should run the premium you have paid should be more than that there should be a difference if you are trading in Nifty then in that if you are trading in Bank Nifty then in that if you have paid more than the premium you have paid if you see a difference in your index or stock then you will start getting profit in that option and see we are talking about expiry.
So, now what is your maximum loss? So, you can use these strategies to benefit on a daily basis. The maximum loss is that the premium you have paid can be over if the market is sideways. And what is the maximum profit? Unlimited. Because in whichever direction the market moves, you can see that the profit can be very good. So, here one more question can be asked that is it necessary to apply stop loss? If you are applying a triangle, then there is no need to apply stop loss.
Because we want the market to move a lot in some direction. Because our view is that the market will move a lot from here, that’s why we are leaving our positions open. We don’t want a profit of 1000, 1500, 2000.Because if the market moves, then this profit can be in thousands, it can be a lot. So, I will wait for some time and we will wait for profits. But it is not required for you all to wait. If you want to take a lot of profit, you can exit your position anytime. So, if you understand the risk to reward ratio in this strategy, then the risk is what we have paid the premium and the rewards unlimited.
So, here the risk to reward ratio can work very well if the market moves. And apart from this, the option strategies, the strategies I have taught you, I have told you the proper risk to reward ratio, how you can maintain and trade. Now, apart from this, you have learned straddle and strangle. Apart from this, learn the option strategies. Step by step you move forward. If you are going to trade, then one more thing I will tell you that you should do some paper trading in the starting.
You start with paper trading first. Paper trading will help you a lot. You will know how accurate you are. And after that, you put real money and trade. If you are not getting accuracy in paper trading, then don’t put money in the starting. Because option trading is high risk and high reward. So, first reduce the risk that money can go. And if you work by making the risk to reward ratio, then only you will earn money.
Otherwise, if you are just going to gamble, then you are going to lose money. Look, strangle and straddle look very attractive. Money is also made, but most people do not follow the risk to reward ratio and make their loss. I don’t want you to do this. So first do paper trading, then you can trade actually.