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Nse option trading strategies module pdf

nse option trading strategies module pdf

Strategy : Sell forex strategie deutsch a Put Buy a Put Nifty Index Current Value Sell Put Option Strike Price (Rs.) 4000 Premium (Rs.).45 Strike Price (Rs.) 3800. (Maximum loss if market Call Option Strike Price (Rs.) expires at or below the option strike price). When to use: When the investor is neutral on market direction and bearish on volatility. If the call is OTM, its intrinsic value is zero. Strategy : Sell Put Sell Call Upper Breakeven Point Nifty index Strike Price of Short Call Net Premium Received Call and Put. Strategy 11 : short straddlhort Straddle is the opposite of Long Straddle.

Options, trading, strategies, top 6, options

2600 at a premium position less premium received. Maximum loss The net debit here. To take advantage of a falling market an investor can buy Put options. 11.45 is the nse option trading strategies module pdf investors maximum loss. The investor is covered here because he shorted the stock in the rst place. 3850) X 100.

It tries to improve the protability of the trade for the Seller of the options by widening the breakeven points so that there is a much greater movement required in the underlying stock / index, for the Call and Put option to be worth exercising. Course Outline : Click here, exam Fees: The exam fees for the, nCFM Options Trading Strategies Module is Rs 2,006 (two thousands six only) inclusive of service tax. The maximum prot occurs if the stock nishes on either side of the upper and lower strike prices at expiration. In case of any further assistance, drop in an email to or call:, other Details: Duration:.5 hours. 4000, the Call option will not get exercised and. The strategy is suitable in a range bound market. When to Use: Investor is very Example Bullish on the stock / index. In this strategy the investor receives a net credit because the Call he buys is of a higher strike price than the Call sold. 23 and a Rs 4700 Nifty Call for. An investor buys a stock or owns a stock which he feel is good for medium to long term but is neutral or bearish for the near term. Call option: A call option gives the holder the right but not the obligation to buy an asset by a certain date for a certain price. He sells a Put option with a Reward: Unlimited strike price. Price closes at (Rs.) Net Payoff (Rs.) The payoff chart (Covered Call) Buy Stock Sell Call Covered Call.

Strategies you Must Know!

The concept is to protect the downside of a Call Sold by buying a Call of a higher strike price to insure the Call sold. A Breakeven: Stock Price Call receives) Premium Buys Call. Which can help in generating income for investors under various market conditions. 4758 for the stock ABC Ltd., another. We look here at the six basic payoffs (pay close attention to these pay-offs, since all the strategies in the book are derived out of these basic payoffs). 400 at a premium. The result is positive incase the stock / index remains range bound. Let us now look at some more Options strategies. This is necessary in order to get the login credentials, so as to book the test date and the test centre to give the examination. 1.1 option terminology Index options: These options have the index as the underlying. A long Put is a Bearish strategy. Qualifying marks: 60, There is negative marking in this module. The payoff schedule The payoff chart (Long Call) On expiry Nifty closes at Net Payoff from Call Option (Rs.) 4100.00 -36.35 4300.00 -36.35 4500.00 -36.35 4636.35 0 4700.00.65 4900.00 263.65 5100.00 463.65 5300.00 663.65 analysis: This strategy.

The module which would be of interest to traders, investors, students and anyone interested in the options markets. When to use: You are neutral on market direction and bullish on volatility. This is a low risk strategy since the Put prevents downside risk. XYZ expects market direction Nifty to fall. In the case of a put, the put is ITM if the index is below the strike price. Figure.5 Payoff for buyer of put option The gure shows the prots/losses for the buyer of a three-month Nifty 2250 put option. 4143.80 The payoff schedule ABC Ltd. If the stock price stays at or below. The strategy requires the investor to buy out-of-the-money (OTM) call options while simultaneously selling in-the-money (ITM) call options on the same underlying stock index. At 3200, all the options expire worthless, so the initial debit taken. 3700 at a premium. 39 for the Put but receives.

nse option trading strategies module pdf

Derivatives, trading, in, options

His prots are limited to the option premium, however his losses are potentially unlimited. Risk: Limited to the amount of Premium paid. The net debit taken to Risk: Limited to the initial enter the trade. The Short Call Condor involves selling 1 ITM Call (lower strike buying 1 ITM Call (lower middle buying 1 OTM call (higher middle) and selling 1 OTM Call (higher strike). Collar 41 strategy. This is a risky strategy since as the stock price / index rises, the short call loses money more and more quickly and losses can be signicant if the stock price / index falls below the strike price. If upon expiration, the spot price exceeds the strike price, he makes a prot. The prots possible on this option can be as high as the strike price. 3700 makes a loss.

A buys or nse option trading strategies module pdf is holding ABC Ltd. Options can be used for hedging, taking a view on the future direction of the market, for arbitrage or for implementing strategies which can help in generating income for investors under various market conditions. The Put will expire worthless. So a Collar is buying a stock, insuring against the downside by buying a Put and then nancing (partly) the Put by selling a Call. 11.45 is his maximum possible loss, lets examine what happens when Nifty falls to 3200 or rises to 3800 on expiration. The outlook is conservatively bullish. Since the initial cost of a Straddle is cheaper than a Strangle, the returns could potentially be higher. Similarly, the intrinsic value of a put is Max0, K St,.e. As the stock price / index rises the long Call moves into prot more and more quickly. XYZ expects little volatility in the Nifty and expects the market to remain rangebound.

Option trading strategies _book

Currently trading. However, the strategy also has limited gains and is therefore ideal when markets are moderately bearish. 3400 at a premium. XYZ buys a Nifty Call with a Strike price. 11 strategy 1 : long call 13 strategy 2 : short call 15 strategy 3 : synthetic long call 17 strategy 4 : long PUT 20 strategy 5 : short PUT 22 strategy 6 : covered. A Put Option gives the buyer of the Put a right to sell the stock (to the Put seller) at a pre-specied price and thereby limit his risk. I like to buy put or short call when stocks or index are at very high price at the start of contracts. Example Suppose Nifty is at 4450 on 27th April. These non-linear payoffs are fascinating as they lend themselves to be used to generate various payoffs by using combinations of options and the underlying. Step 2: Examination procedure: ncfm examination is to be given at the centres notified by NSE. 170.50 expiring on 31st July.

XYZ Premium (Rs.) 132 Price of Long Put - Net pays Premium Paid Sell OTM Put Strike Price (Rs.) 2600 Option. The two calls sold result in a loss. A buys the Market Price (Rs.) 3850 stock XYZ Ltd. If the stock price closes below the out-of-the-money (lower) put option strike price on the expiration date, then the investor reaches maximum prots. A does not mind getting exercised at that price and exiting the stock. It nse option trading strategies module pdf involves selling an OTM (lower strike) Put and buying an OTM (higher strike) Call. Premium paid.) The payoff chart (Collar) Buy Stock Buy Put Sell Call 42 Collar Net payoff (Rs.). A long buttery is similar to a Short Straddle except your losses are limited. At expiration, an option should have no time value. This strategy is equivalent to the Bull Call Spread but is done to earn a net credit (premium) and collect an income.

Options trading (advanced) module?

The underlying stock has to move signicantly for the Call and the Put to be worth exercising. Bull PUT spread nse option trading strategies module pdf strategy 45 strategy 17 : bear call spread strategy 47 strategy 18 : bear PUT spread strategy 49 strategy 19: long call butterfly 51 strategy 20 : short call butterfly 53 strategy 21: long call. In-the-money option: An in-the-money (ITM) option is an option that would lead to a positive cashow to the holder if it were exercised immediately. XYZ is bullish on Nifty on 24th June, when the Nifty is at 4191.10. 364.20 (The call with strike price. 52, expiring on 31st July. A stock ABC Ltd. 3500 makes a loss. An investor shorts a stock and buys an ATM or slightly OTM Call. NSE has set up a sophisticated electronic trading, clearing and settlement platform and its infrastructure serves as a role model for the securities industry.

Options trading (advanced) module

3500 nse option trading strategies module pdf strike price call at a premium. The maximum prots occur if the stock / index nishes on either side of the upper or lower strike prices at expiration. 4270.45 reduced the cost of the trade (if only the. The maximum prots occur if the stock nishes between the middle strike prices at expiration. A receives Breakeven: Stock Price paid - Premium Received Strike Price (Rs.) 4000 Premium (Rs.) Break Even Point (Rs.) (Stock Price paid - Premium Received) 80 3770 Example : 1) The price of XYZ Ltd.

Clipping is a handy way to collect important slides you want to go back to later. In return for granting the option, the seller collects a payment (the premium) from the buyer. His loss in this case is the premium he paid for buying the option. 21.45 and buys a further OTM Nifty Risk: Limited. The Put that is sold is generally an OTM Put. The resulting position is protable if the stock / index shows very high volatility and there is a big move in the stock / index. The Put can be exercised. Strategy 7 : long combo : selut, bualong Combo is a Bullish strategy. Reward: Unlimited Breakeven: Strategy : Buy Put Buy Call Upper Breakeven Point Strike Price of Long Call Nifty index Current Value Net Premium Paid Call and Put Lower Breakeven Point.

nse option trading strategies module pdf

Learn, options, trading - Online, nSE

But it should be done carefully since the potential losses can be signicant in case the price of the stock / index falls. The investor shorts a stock because he is bearish about it, but does not mind buying it back once the price reaches (falls to) a target price. The premium paid for long with strike price. 100 c) Pay Off (a b) received :. Babasab Patil ncfm - Financial markets a beginners module (NSE) Nimesh Parekh LinkedIn Corporation 2019 Share Clipboard Link Public clipboards featuring this slide No public clipboards found for this slide Select another clipboard Looks like youve clipped this slide to already. Today NSEs share to the total equity market turnover in India averages around 72 whereas in the futures and options market this share is around.

4100 b) Pay. Current Nifty index Risk: Limited to the Premium. The payoff chart (Bear Put Spread) Sell lower strike Put Buy Put Bear Put Spread. A, executes a Short Strangle by selling. XYZ Breakeven: Strike Price of Receives Short Put - Net Premium Buy Put Received Option. So if the stock has moved from. 3850 g) Net prot :.

He sells a Put option with a short term income. Provided the stock remains below that level, the investor makes a prot. Figure.6 gives the payoff for the writer of a three month put option (often referred to as short put) with a strike of 2250 sold at a premium.70. As the spot Nifty rises, the call option is in-the-money and the writer starts making losses. XYZ pays Premium (Rs.).00 Lower Breakeven Point Break Even Point 3788.55 Lowest Strike Net (Upper) (Rs.) Debit Break Even Point 3411.45 (Lower) (Rs.). Of Maximum Duration (in Questions Marks minutes) Pass Marks Certicate Validity (in years) 1 Financial Markets: A Beginners Module Mutual Funds : A Beginners Module Securities Market (Basic) Module Capital Market (Dealers) Module Derivatives Market (Dealers) Module fimmda-NSE Debt Market (Basic). If the share price falls, he prots.