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“ Option Trading “ when you heard about this first of all  which thoughts comes to your mind?

1. It’s a gamble
2. It’s a loss making trading
3. Only FII and DII should perform this trading
4. Retail trader should stay away from this trading type

I am sure all these points have come to your mind when you heard about option trading.

But it’s a wrong Perception.   Option Trading is a systematic business and you need to do it with proper learning and with proper discipline way.

An option is a contract that gives the holder the right, but not the obligation, to buy or sell an underlying asset at a specified price before a certain date that is your expiry of the contract.

Here’s how it generally works:

1. Buying Options: A trader can buy option contract that is strike price through demat account. Here trader can buy CE and PE that is CALL or PUT as per the trend.  In case market trend is up then can buy CE and trend is downside then can buy PE.
2. Premium : When Trader buy CE or PE, he buy premium. For example Bank nifty current price is 48500  and market trend is up side then he has to buy 48500 CE.  Here he has chosen strike price as 48500 and premium must be around 400. Bank nifty lot size is 30 hence trader has to invest 12000 rs to buy this contract.
3. Strike Price : We take here an example of Bank nifty to understand the strike price. As said above current price is 48500 then strike price  should be near by 48500. Trader can choose 48400,  48500 and 48600 as per the margin available  in demat account.
4. Lot Size : SEBI has decided the lot size ( share quantity) for each and every stock and indices. For Example nifty has   75 and Bank nifty has 30 Lot size.
5. Expiry Date : SEBI has decided to expire the contract on a certain period that is called expiry. Nifty has weekly expiry and Bank nifty has monthly expiry now days. Stock option has always monthly expiry.

Difference Between Call and Put options

• Call Option :  Market trend is upside then you need to choose Call Option and buy the  CE premium.
• Put Option : Market trend is downside then you need to choose Put option and buy the PE premium

Option buyer and Seller :

Option trading has two types of trader.

1. Option Buyer : Here trader buy the contract and pay the premium price for the gain.  For Example Bank nifty price is going upside then here trader BUY CE Premium and wait for the gain in premium price.
2. Option Seller : Here trader sell the contract and taking the  benefits of premium decay

Option Trading Strategies:

Now we discuss how we can perform option trading for the consistent income.

IN the market there are  many inbuild strategies available. Trader can  trade with the help of them.

Tradeshala developed Mathematical System for option trading.  In this system we have developed mathematical formulas from which we get daily levels on 5 min timeframes.  These levels are indicating buy and sell levels on  the chart.   Once the market start levels are displayed on the chart automatically.  Once  the price crossed buy level trader can take position buy side that means he can buy CE option and can sell PE option.

Tradeshala has developed around 11 strategies which involves option buying and selling.  Tradeshala has a mastery on hedge positions which involves no risk strategies. All the Tradeshala students are earning consistent income from these strategies.

Tradeshala Strategies :

1. Price is match with open price
2. Daily 50 points strategy
3. EMA Setup with single leg position and hedge strategy
4. Intraday short straddle with stoploss
5. Tradeshala scalping strategy with 10 lots
6. Ce  AND Pe mathematical levels with excel automation
7. Stock option intraday option trading with Maths System
8. Stock option consistent income strategy without any risk
9. Bank nifty and Nifty swing trading monthly strategy
10. Long Term strategy with hedge for consistent income

Tradeshala Students  use these strategies and taking benefits of option trading for their consistent income.

Choosing broker for Option Trading :  Trader should choose broker who is having user-friendly platform, easy to read OI data, option chain analysis  and very important brokerage should be less.

Conclusion :

Trader should learn option trading first and then start trading with proper strategies.  Discipline must follow in trading which comes by practice.