Option Trading in Stocks | Best Shares for Swing/Positional Trade in Share Market

Introduction

Well, in this Blog, I am going to share with you such a beautiful concept.  You can thank me later because the concept is so amazing. Now today we are understanding such a concept that you will be able to catch big moves in the market. The second thing is that I liked this concept so much and if something gives me benefit, then I think I should share it with you. So today we are going to learn that where there will be a seller’s trap, we will enter there and you will see that in such moments where the seller is trapped, money is being made. What am I saying? Many people may not be understanding, so I try to tell. When we trade options, then in options, either you buy the option or you sell the option. Now basically what happens is that the seller has an added advantage. That is the theta decay. You have the advantage of theta decay that even if you do not move the option, then like ice is melting, your options are melting and most of the options are worthless and expire. I would like to explain this to you.

The Process

You see here, will understand the concept. I take a little time again, but I mean by explaining the concept, I tell you that. So you see the options chain here. Now basically all the options you see in the yellow are in the money. The yellow you see here is in the money. This site is put, this side is called and all the options in white are out of the money. All the options in white are out of the money. Now, what will happen? Whenever the market expires, all the options you see in white are not so small. If we look here, we will see that there are so many options here.

There are different strike prices and there are different strike prices. Whatever the price of all these options is, whatever you see here, LTP is 44, 28,79, 5, whatever you see, similarly, whatever you see here, all these prices will be zero on expiry and it depends on which month or which week you are looking at the option chain. So in Nifty, we have both weekly and monthly options. Stocks have monthly options. You can pick any option chain, any expiry and you can see. So we know this thing first the out-of-the-money options have to expire worthless.

Now the market moves in that direction, then the money also becomes good. We also know this. Suppose the market starts increasing, then the option here, suppose today you are seeing 17,300 strike,its option is 17 rupees here. Now if the market moves, then the price of this option will increase.

So how much will increase, how much will increase, we have told you all that. Now if it moves here and if it does not, then it will become zero. 5 paisa is left, the price you have seen on expiry. Similarly, if the market falls, then if it falls at 17,000, then the option of 30 rupees will increase and if the market does not reach there on expiry, then everything will become zero. Now if it becomes zero, then options trading is a zero-sum game. What does this mean? If there is a loss for this buyer who has bought an option for 30 rupees, then the money will go to the seller’s pocket and when the seller will be at a loss, then the money will go to the buyer’s pocket.

. Now what happens with the added advantage seller that if nothing happens, if the move does not come, then due to theta decay, all the money which is premium will become zero and the seller will make money most of the time.So who will make money most of the time? The seller will make it. He has about 66% chance of making money intrinsically and the buyer has about 33% chances of making money. You believe it. So say 34, say 33, it is the same thing. Now here,the concept we are explaining to you, it will happen sometime that it will be a loss and when the seller will be at a loss, then the buyer’s jackpot will be applied. It is said that the option buyer’s pockets are empty.

On expiry, the option buyer’s pocket is empty and the option seller’s safe is empty. When it happens, it increases slowly, so the safe increases slowly, but when it is empty, it is empty and the buyer’s jackpot is applied on that day. Now because the buyer’s jackpot is applied on someday, how will we know that day? So here we are going to understand a beautiful concept again.

I say this, so I am repeating it that we have to understand two things. When is the seller running away from his strike? I say he is running away with his lungi, so when the seller is running, we will run after the seller, which means the price will run there. How will it run, how do you know, let’s see. So here we see the option chain once, then I will teach you something amazing again. So look here, we have opened the option chain of Nifty. I can see the seller here, for example, at the strike price of 17,100, I can see 1,72,000 quantity and open interest is standing.

Now assume that themarket starts falling from here. If the market falls and theseller leaves his position, then the open interest decreases. If the open interest decreases here, then it will go to another strike and assume that overall, the open interest is drastically reduced in this place, and OI starts developing here on the call side, then I will see that the resistance has become strong, it has become weak and along with, another important thing is seen here, which people do not see much, which is volume.Look at this, the volumethat you see here, the volume seen here, this is a highly importantthing. It is importantbecause the volume seen here, the strike price at which therewill be the most volume andthe most open interest at the strike price, that is the support, and the price at which there will be the most volume and the price at which there will be the most OI, that is resistance.

If this changes, if the volume shifts from here, instead of 17100, we are seeing a volume of 27 lakhs here and here we are seeing a volume of 21 lakhs at 17000.Now suddenly what happens, there is a volume of 30 lakhs here and open interest is already more there. Look, open interest is 1,94,000. Open interest is more there, but the volume is more at 17100. As soon as the volume increases there, whereas the put sellers running with their lungis, you can say put writers, they are running at a strike price of 17000. So I am not seeing the price action right now, I am just looking at the data, what is happening in the data. If this changes, then my view will be that a move from here can come from the bottom. Now you trade in Nifty and Bank Nifty, then trade in Nifty, then there will be a move of the index.

We know what will come in the index, we have discussed this many times that the move of the index will come. So the move of 1% in the index is very good, and the move of 2% is very good, but if we identify in the stocks, the same thing, the concept is the same, the concept is the same, we have to understand that the concept is the same. If the concept is the same, then cricket shots were taught to Sachin Tendulkar and Kevin Peterson. You have to understand that the concept of cricket is the same. Now play in England or play in India, the same thing, but along with the concept, you have to understand where more moves can come. You can get a big move in the stocks. When put writers will be trapped, they will run, then big movements can come there. How much money will be made in options in the movement of 5% plus? If it moves in the price of the future or it moves in the price of the stock, then how much money will be made in the options? It will be a lot. 5% is a lot.

So now if you see so many things, then there can be confusion. So now we are going to the trap indicator. There are so many stocks, how to identify that there is a trap in it, then click on the trap indicator? Now the best thing about the trap indicator is that you get signals here. So those who say that we need tips, signals, and trade, then you are getting it here. You see carefully, when these signals are generated, today I am writing the blog on the 22nd. These are all signals of today and signals of tomorrow. Now, what are the signals? Who is getting trapped?

Look here, for example, I can see Pedalite here, where I can see that Call Rider is trapped. Now Call Rider is trapped, I can see that PutRider is trapped inside the Hevels. Now what is important, let’s understand this. Before this important trap, I told you the build-up in the last blog that what is my overall view about the market. Is my view that the market is bullish from here, what I see is that the market is bearish. It is important to make a view and a view is important.I will not make it by myself. I will see some data. So here for example, I am seeing the built-up data. We are going to see it in the future. So I don’t want to see Piddle Lightin’s future. If you want to see Piddle Light, you can definitely see it. So in Piddle Light, absolute here, OI, see green has come here. This is an important thing. Now we were talking about the call-writer trap.

What is in the call-writer trap? Here, money is actually invested in Piddle Light and it is very big in absolute number. So the way it was selling, it has been bought at a higher level, which is an important indicator. So this is Piddle Light. But I will make a view of myself from Nifty. So if I look inside Nifty, then I can see that there were massive shots inside Nifty and the green that came was not so big in absolute number. So my overall view of the market is not positive. So you can get a separate view of Piddle Light. You can also check its build-up. This is important. You can see that. So we were talking about Havels, so let’s see Havels. This is important. Now see, if we talk about Havels, then there is a lot of mixed data here and this is important. I have explained this to you once, and I will tell you again.

So we say that the market always runs in cycles. Cycle is basically long, long, this is so mixed data,so I am not saying much for this. I will tell you how you have to check. So if Isee green, then I see blue.If I see green and then I see blue, what does it mean that themarket is seeing me up tohere, that long and long unwinding, which is good. If it wouldhave been continued fromhere, then the price could have gone up from here, but the shotcame and after the shot,the shot covering came. The price will go up in the shot covering,but ultimately theshot has happened. So what happens when someone buys, when he books a profit, then long unwinding comes. In long unwinding, the price goes down, but ultimately it comes long again, the pricegoes up and we have told you in the last blog.

If you have not seen it, then you will get the I button, you can go and see that the price goes up and down according to the Dow theory. So long happened, long unwinding happened, similarly, it falls down, the shot happened, the shot covering happened, then the shot happened, then the shot covering happened, then the price goes up like this. So here we need to identify the cycle. Now we have to see what has happened in the latest. So the shot has come here in the latest and before this, the shot covering has happened. Now how big is it on the absolute number for us, and what is the significance, so if I look carefully here, then I do not see any massive buying recently. In recent, I see a shot here, I see a shot covering,the data has come in the middle of a long unwinding, but then the shot covering happened and then the shot happened. So now the buying has not come here, it is so important and if the buying has not come, then I had to see it.

It is important to take a view, so take a view, after taking a view, you come back to the trap, where is the trap, here is the trap and you can search also. So you can search here, we told you that if you write the trap here, then the trap will come and you will search the trap. Now here I saw the Havels.

for example, in I saw Kotak Bank that there are Portrait traps in Kotak bank, the price can go down. What you are seeing is today’s signal, what happened in the signal that came before, let us see here. So it has given some signals, whose dates I would like to tell you, we are making this vblog on 22nd, on 9th, a signal came in stock,in which almost 30% of the stock has fallen, 30% profit has been given at the price of futures, not at the price of options. Do you understand the face of 30% in the option? For example, if you have taken the put option of Nifty, and Nifty falls by 30%, then how much money can it make, I do not need to tell you. You are smart, but I am showing you this example. Here the signal has come, but what is more important than the signal is the concept. The signal comes in 50 places, in telegram, I do not know, it gives any trade, it gives from anywhere, but what is the logic behind it?

The logic is where are these Portrait traps happening? My overall Nifty was not bullish view yet, I will observe all the shots where it is being made. For example, here I can see a Portrait trap in PyramidEnterprises, look at the return there, there is a 19% return, and there is a 19% return in the price of futures. Similarly, when this signal is completed, then it is written as an exit. What does exit mean? Here they have booked your profit, 15% profit has come here. It is not that profit will come every time, it is not like that. There can be many signals in which the return is not so much, but you see when the returns are coming, then the return is coming at 33%, the maximum drawdowns are also there, you will see here that here the Portrait trap was given inside the stock, but the stock went up, but it made the exit.

If there is a stop loss, then it will make the exit. It had given a call at 3080, but it made the exit at 3197. It made the exit, that is a different thing, but you definitely, in most of the losses, they made you exit first, but the profit that is happening here is still open trades. In this, only in profit, it has made the exit in HDFClife. Now in PEL, in PyramidEnterprises, there is an open position. Similarly, you are seeing Blue Pin here. You know that Biocon has been banned for trading, but for example, you are seeing a 9% return here. So here you are seeing a return in this way. Now look at Infosys, this is important. I do not know, the blog can go late. When I am writing it, it will go after that, but you do your analysis. Now in Infosys, it has already given a return of 8.64%. 8% Infosys will fall. Liquid stock is in the options. According to the date of these signals, the money that is made here is here. Now the money that is made, you assume that in today’s option, we will talk about the latest, what we have seen about it. So our signals today, assume that you say that I want to trade in Hevels or I want to trade in Kotak Bank. So if you want to trade in Kotak, then you will simply go to the optimizer, go to the find strategy and see here, Kotak Bank has already picked it up.

Now put right is trapped here. So, brother,I am bearish here. Now you have to put your view. Now the price is going to be 1700 here and you say that I want to trade for the expiry. It is expiry on the 28th. So you say that according to you, it will fall to 1600. For example, you will definitely see the price on the chart. After that, you say that I will take stop loss. The price should not go above 1700. So you click on the getting strategy here and it will pick up the strategy for you. Which strategy will be, right for you? So according to the risk-to-reward ratio, we see this strategy. We are put spread, so 6.58 you are seeing the reward-to-risk ratio here. It can be a profit of 27000, or it can be a loss of 4200. If you see the put ratio back spread, similarly, see the bull put ladder here, then it will give you a lot of strategies.

If you want to trade in it, then it will be written here which leg you have to buy, which sell you have to do, at what price you have to do, which expiry you have to do, all that has come here. The margin is only 34000 required and you can make a profit of 27000 on it.It can be a loss of around 4200. So now you have taken it out of the trap. In the previous blog, we took out the intraday stocks through the trigger and today we are taking it out through the trap. In the trap, you get the full signal, so it becomes easy for you to find. So this trap indicator, see if you want to trade on an intraday basis, then go and watch the trigger blog. It is very good for intraday stocks and because there you are trading on the break out and break down and when there is a little view of a few days and a few weeks, then you can go and trade on it because you want to trade to chase a big return.

So this is a beautiful concept to understand where the sellers are getting trapped and this concept is not very well known. Very few people know, so if you like this blog, if you find it important, then you can share this blog with all your friends on social media where you are present so that people get valuable information and that it is reaching free through the internet. Many people can charge for this information, but what is available for free, many people do not value free things. I hope you will value it, then you can share this blog.