Category Archives: Trading Snippets

Copy trading is a popular form of social trading that allows traders to automatically replicate the trades of experienced traders or investment managers. While it can be a convenient way for beginner traders to gain exposure to the markets, there … Continue reading →

Option selling typically requires more money than option buying because the seller of an option is obligated to fulfill the terms of the contract if the buyer chooses to exercise their option. When an investor sells an option, they receive … Continue reading →

Placing stop losses is an important risk management technique used by traders to limit their losses when trading financial instruments like stocks, forex, or cryptocurrencies. The placement of stop losses can vary depending on the trading strategy and the specific … Continue reading →

Option scalping is a trading strategy that involves buying and selling options quickly to make small profits. To be successful at option scalping, it’s important to focus on several areas: Focusing only on any one area may not give the … Continue reading →

Developing an option trading style involves creating a set of rules and guidelines that you will follow when trading options. Here are some steps to consider when developing your option trading style: Remember that developing a successful option trading style … Continue reading →

Here are some common mistakes that options traders make: There is no doubt options trading can be very profitable, but it’s important to be aware of the risks and to trade with a plan. Traders who avoid these common mistakes … Continue reading →

Finding your edge in option trading involves developing a trading strategy that gives you an advantage over the market. Here are some steps that can help you find your edge in option trading: By following these steps, you can develop … Continue reading →

Trading outcomes depend on a wide range of variables that are difficult to predict or control. Here are a few points to consider: To conclude, it’s possible to earn a profit from one lot of Bank Nifty options trading, but … Continue reading →

Position sizing refers to the process of determining the number of options contracts to buy or sell based on the trader’s account size, risk tolerance, and trading strategy. It is important for options traders to carefully consider their position sizing … Continue reading →

A cash-covered put is a options trading strategy where an investor sells put options while maintaining enough cash in their account to cover the purchase of the underlying asset if the options are exercised. When a person sells a put … Continue reading →

Institutions trade in a variety of ways depending on their investment strategy, size, and the assets they are trading. Here are some common ways that institutions trade: Institutions have a wide range of options when it comes to trading. They … Continue reading →

The behavior of options prices is closely related to the level of volatility in the underlying asset. The VIX, Volatility Index, is a popular measure of market volatility that is derived from the prices of options on the NSE options … Continue reading →

Option prices can move erratically due to a variety of factors, including changes in the underlying asset price, changes in volatility, changes in interest rates, changes in time to expiration, and changes in the market’s expectations. These factors can interact … Continue reading →

Using options is a common strategy to offset risk in investing. Options are financial instruments that give the holder the right, but not the obligation, to buy or sell an underlying asset at a certain price (strike price) on or … Continue reading →

The importance of instrinsic value and time value of options … Buying out-of-the-money (OTM) options can be a tempting strategy because they are cheaper than at-the-money or in-the-money options. However, there are several reasons why buying OTM options is not … Continue reading →

There are several reasons why traders may fail to follow their trading strategies: Emotional trading: Traders may be influenced by their emotions, such as fear or greed, which can cause them to deviate from their trading plan. For example, they … Continue reading →

A covered call is a strategy in options trading that involves selling a call option on an underlying asset that is already owned by the trader. Here is how it works: The covered call strategy is often used by traders … Continue reading →

The choice between intraday and positional trading depends on your personal trading goals, preferences, risk tolerance, and market conditions. Here are some points to consider: Intraday trading involves buying and selling securities within the same trading day, while positional trading … Continue reading →

No, a losing trade does not necessarily make you a dumb trader. In fact, it is common for even the most experienced and successful traders to have losing trades from time to time. The key to being a successful trader … Continue reading →

Option writing, also known as selling options, is a strategy in options trading where an investor sells options contracts to another investor in exchange for a premium. This means that the option writer is creating an option contract and selling … Continue reading →

Option prices are strongly influenced by changes in volatility. The higher the volatility of the underlying asset, the more likely the option will move into the money and the more valuable it becomes. Conversely, low volatility reduces the chances of … Continue reading →

There are many successful options traders in the world. Some well-known names in the industry include: Blair Hull – He is a successful options trader and founder of Hull Trading Company, one of the largest market-making firms in the world. … Continue reading →

Traders can experience feelings of greed and fear due to the high-stakes and unpredictable nature of financial markets. Here’s a bit more detail on each: Greed: Traders may become greedy when they see the potential for high profits, and they … Continue reading →

Institutional traders and retail traders are two types of market participants with different characteristics, goals, and strategies. Institutional traders are professionals who work for financial institutions such as hedge funds, investment banks, or pension funds. They usually trade large volumes … Continue reading →

In options trading, intrinsic value and time value are two crucial components that determine an option’s price. Intrinsic value refers to the inherent value of an option based on the underlying asset’s current market price. It is the difference between … Continue reading →

Theta, also known as time decay, is a measure of the rate at which the value of an option declines over time as it approaches its expiration date. Theta is an essential component of options trading because it affects the … Continue reading →

Yes, a trader can certainly enjoy the magic of option trading, as it can be a highly engaging and potentially lucrative activity. Trading options requires careful analysis and decision-making, which can be intellectually stimulating and rewarding for many traders. Additionally, … Continue reading →

Beating institutional traders is a challenging task, but it’s not impossible. Here are some strategies that retail traders can use to potentially beat the big players: In conclusion, beating institutional traders is not easy, but it is possible. By focusing … Continue reading →

It’s difficult to make a blanket statement about whether retail traders are always losing to institutional traders, as there are many factors that can influence the outcomes of trading. However, there are some general trends that can be observed. Institutional … Continue reading →

There are several challenges that option traders face, but one of the biggest problems is managing risk. Options trading involves a high degree of leverage, which can magnify both profits and losses. Therefore, option traders need to be skilled at … Continue reading →