There are many complex Option Trading strategies out there but the most profitable are some of the simpler ones. The top 3 of them are Long & Short Straddles, Long & Short Strangles and Bull/Bear spreads.
Option Buying is more common when compared to options selling. This is because option buying requires less capital and the maximum profit is uncapped. This lures many small retail traders who ultimately lose money when it comes to options buying for various reasons. Follow these strategies to increase your chances of generating profits.
Option Selling requires large capital. Due to this many small retail traders resort to option buying where the margin money required is very less. Although with various strategies you can reduce your overall risk and margin required in Options selling. Know more about how much money is required to start option selling. The difference in the margin money required for selling a naked Option vs Selling a Hedged Option here.
Options Trading is a risky business and options traders have to look at various parameters before taking a trade. Choosing a time frame is one of the factors in options traders. Both option Buyer and Sellers use different time frames to trade. Lets see which time frame is most useful for options buying as well as selling.
Opstra Definedge is a platform that provides many tools and features to Derivative traders. Both Options as well as Future traders can make use of this platform. Some of the primary tools of Opstra are the Strategy Builder, IV (Implied Volatility) chart, Options Backtesting, Options Simulator, and many more. The Options Strategy Builder is one of the most intensively used tools on the platform.
Gamma is an Option Greek that affects the change in the Option premiums. Options traders need to know about Gamma and some other Option greeks to calculate the risk per trade. The effect of Gamma becomes stronger as the expiry approaches. The Gamma also increases as an Option becomes ITM or ATM from OTM. Know more about it here.
Opstra Options Strategy builder is a platform for Options and Futures traders. It provides many tools for trading derivatives, Some of these include Options Simulator, Options backtesting, IV (Implied Volatility) Chart, Option Chain analysis, and much more. Both beginners, as well as advanced traders, can use this platform as it offers all the necessary features for both these groups.
A collar option strategy is a multi-leg option strategy that involves an existing long position in any security in the Equity or Futures market and buying an OTM (Out Of the Money) Put option and selling an OTM Call option in order to hedge the existing long position from any short term bearishness. The overall Profit and loss are capped in this strategy and this strategy is implemented when the overall outlook of the underlying asset is bearish.
Sensibull Pro is a package offered by the company in terms of options trading. Features such as a statistical tool, strategy implementation advice, custom strategy build, IV charts, currency options, and more make it unique and different from the other plans. If youre serious about trading in options and are looking for a concrete structure in trading in options, then the pro package of Sensibull makes complete sense.
An Iron Condor is a 4 legged hedged option strategy that includes selling 1 slightly OTM (Out of The Money) Call as well as 1 Put option and, buying 1 Slightly Far OTM Put & 1 Call options in order to cover the risk of the Naked short positions. This strategy is implemented when the overall outlook of the underlying asset is neutral or rangebound and no major moves in any direction are anticipated. The maximum profit and loss are capped in this strategy, and by hedging, margin benefits can be enjoyed.
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