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Basics Of Option Trading & Market News

Nifty 1

END OF THE DAY REPORT (20 April 2015):

Nifty below 8450 mark, biggest single-day drop in 3 weeks:

Market ends in a red territory for the fourth consecutive day registering their biggest single day fall in 3 weeks led by several factors such as high selling pressure is seen in index heavy weights secondly on disappointing quarterly numbers By IT stocks and last due to FII selling. Sensex tanks 556 points to ends at 27886 while Nifty ends below 8450 dips 158 points.

HEADLINES FOR THE DAY:

  • Reliance tanks 5% on profit booking on NSE.
  • Sasken Communication zooms on share buyback plan.
  • FMCG stocks falls as much as on the bourses.
  • ONGC dips on media reports that a fire blow out occurred at companies Olpad town in Gujarat.
  • Coal India dips as much as on a block deal.

KEY STOCKS FOR THE DAY:

  • NMDC dips 5 percent today as company had reduce iron ore and lump ore prices by 20 % and 6.1 % today respectfully.
  • Glenmark pharma moved higher in an otherwise market today on NSE on fund raising plans by issuing shares to Temasek (Singapore’s state investment arm).
  • Videocon Industries gains more than 5% in early trades as company discovered oil in Brazil.
  • Gujrat Gas hits new high as extended its previous 4 day gains on positive news, to commence its plant in thane too.
  • Shares of jet airways dips on the back of raising competition as reveal companies like indigo, Air Asia has offered new discount on travel plan.
  • JSWSTEEL gains as after reported that in financial year 15 crude steel production up by 4 percent.
  • Shares of TWL (Titagarh Wagons Limited) ends up in an otherwise market as reported better than expected quarterly numbers, net profit stood at Rs. 8.78 crore.
  • IT stocks extends its losses as TCS reported lower than expected Quarter number as well as on concerns of upcoming results of Wipro and HCL Tech.
  • NTPC has signed a MoU with the Odisha govt for setting up of an Industrial Training Institute (ITI) in Ganjam district.
  • Crompton Greaves gains on reports that Advent International a United State (U.S). private equity firm will buy its division (consumer products division).

SOME STOCKS FOR NEXT TRADING SESSION:

  • Delta Corp falls but could not breach its immediate support of 86.55 and ends around it, Further negative moment is expected from stock. Sell below 86.50 targets 85.65/84.80/83.95 Maintain SL of 87.50.
  • SRF breach all its important resistance (given closing above it) and hits fresh high which indicates more buying from here. Buy above 1122.50 targets 1133.70/1145/1156.50 SL 1111.

GLOBAL MARKET:

  • Asian stocks were mixed after a weekend cut by a full percentage point of the amount of cash banks must keep as a reserve.
  • European shares gains as trading volumes were expected to remain thin as well as market sentiment improved despite persistent concerns over Greece’s debt woes and with no major U.S. data or euro zone to be released throughout the day.

NEWS TO WATCH OUT:

  • Watch out for the Quarterly numbers of HCL Tech and Wipro on Tuesday i.e. on 21st April 2015.

Today Market Trend:

– MCX Gold is likely to see some selling pressure at around 26980.

– MCX Gold is trading at resistance of 26845. It is expected to give breakout and could see the level of 26925.

– Indian markets are expected to trade with downside risk. In overseas markets, Asian shares were trading lower, following a lower finish on Wall Street on Friday. RIL’s (Reliance Industries Limited) net profit rose 8.5 % to Rs 6381 crore on 33.3 % drop in turnover to Rs 70863 crore in Q4 March 2015 over Q4 March 2014. RIL (Reliance Industries Limited) said in a presentation to investors that the company plans to restart its entire network of 1,400 retail fuel pumps. Over 320 fuel outlets have already become operational, RIL said. NMDC increased prices of its products i.e. Lump iron ore and fines. COMEX Gold seems to be positive and is trading in a close range from 1202-7 USD, watch for a breakout.

Basics Of Option Trading

All traders should have a particular section of their portfolio and fixed separately for option trading. It helps us in for making our trade more versatile and it provides not only better opportunities of leveraged trade, but also it makes a huge amount of profits. An option trading can assist you to hedge your trading portfolio and bound possible downside threat. Investors must be sitting on the sideline because they don’t know the options.  Many important trading tools are available by which you can trade very smart and they are necessary to know for every trader. This blog based on Options Trading gives you the necessary information that needs to speedily learn the essentials of options.

What are the Options?

Basically an option is the traders’ choice not an obligation; a trader can use option to perform trade with superior Option Tips in more versatile manner in the stock market. It has two security agreement, a call option and put option, with this agreement you have right to trade that means buy (call) and sell (put) the different trade such as index, fundamental equity or ETF at a set price, this price also known as strike price  during a specific time phase.

You’ve already observed how the options approach works on Intraday or long term process without appreciates it. In fact, you possibly have bought the right to secure yourself beside threat in some part of your life, like as the house, physical condition or vehicle insurance. Those equal ideologies can be enforced to options trading.

Let’s we get an instance of bike insurance for better understanding. You buy a new bike after taking time to decide which model you want based on safety ratings, how smooth the ride feels and how well it will accommodate your needs. However would you ride that faster new bike without captivating precautions in the happening that something takes place in your asset? Practically not because of bike insurance is necessary for all the bike riders by the traffic rules.

When you purchase an insurance policy, you pay the premium in monthly basis or yearly basis as you like. Insurance may be for automobile, life, health properties, and it provides protection for future circumstance. Nobody can predict their future, but we can effort for securing the future. The above effort is an another form of policy, eventually might be esteemed at numerous times supplementary what you essentially pay for it, although  you have rights that you can charge nominal amount as nominal for this security net and it is a small price which compensates in contrast.

In the last month of the year, if your bike insurance requests to be renewed and your bike hasn’t been concerned in any accident that you needed a file for a claim, you still become a victor because you didn’t drop any additional money than your initial asset and you can be relaxed for an entire year with calm because of of the first position, you had the insurance.

That’s the similar protocol used in the case of options trading, except that well-researched automobile buy with a preferred stock holding. Insurance for a human works as like that an option works for trade.

What are Options Agreements?

With any options approach which you execute, always you keep in mind that option is investment tool which secure your investment than the probability of profits may be increased if investors use option with intelligent efforts and smart tips like as Stock Tips, Forex Tips or any kind of other tips. In an option contract, you need to pay some extra money for option so that you are able to construct the holding as a large or small investment as you need. When you buy an option agreement, you have to pay a premium for the right that goes along with a grip that agreement.  It’s truly up to you and your investment for a particular aim, these contracts help you to achieve big profits and your risk patience.

It’s also essential to keep in mind that when you buy options, the price estimate will be per share and not per agreement. You will require doing the simple computation below to decide the real price.

Here is the example of the option calculation.

Total cost of trade = Number of contract * Price per agreement.

Option Price

Strike Price

Particular derivation agreements are executed at a specific price, and then this price is also known as strike price. Strike prices are frequently used to explain stock and index options trade, where strike prices are already set. In the case of call options, the strike price is price on which the security can be purchased up to the expiration date; on the other hand the strike price is the price at put option at which shares can be sold. The strike price is an essential element of the option agreement and the simply static variable that involve to option’s pricing. In every trade for each stock option is available, that means providing options for public trading, there are many different finishing dates and strike prices.

To decrease confusion, every times the exchanges normally calculate strike prices, according to the current stock price. We get an instance to more understanding, a stock trading process between from $50 to $250, after that the strike prices  in this case will be growing at the $25.0 price, such as $50, $75.0, $100, $125.0, $150, $175.0 etc.

By considerate risk, you can become an improved and a more gainful trader.

Many traders get excited for the options trading due to reason of them like the leverage that is achievable if an investment goes fine. Even as stock traders might earn 10% to 20% returns of their investment on a stock, violent options traders could dynamically earn a 1,000% return on the same amount and time.

Those kinds of returns are possible if the leverage provided by options trading. Sometimes the savvy options investors that can control an equivalent number of shares as the conventional stock traders for a part of the investment. For Nifty Traders, Nifty trading may be very beneficial if they trade with superior Nifty Tips.

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