Options Trading - Frequently Asked Questions

7 months, 1 week agoComments closed

faq options

Q: What is options trading?

Ans: Options is a form of derivatives which can be traded on stock exchanges.

Q: What are options recommendations?

Ans: Techpaisa provides option recommendations to its premium users. You can have a look at all old recommendations here.

Q: How to become a techpaisa’s premium user and get options recommendations?

Ans: You can get a free trial for 1 week by registering here. After 1 week, service is paid.

Q: Do you send options recommendations by SMS?

Ans: Right now, options recommendations are sent over email only and not by SMS. Emails are sent to your registered email-id between 3:00PM and 3:25 PM on every trading day. Note that there might not be a recommendation on a trading day if our trading system does not find any trading opportunity.

Q: How much quantity/lots to trade?

Ans: Quantity of lots to be traded depends on the capital you have. We generally recommend 1 lot of option to be traded.

Q: How to keep track of live recommendations?

Ans: Every recommendation is given with an exit condition. You have to keep track of exit conditions yourself and exit accordingly.

Q: Do you send an intimation to close the trade?

Ans: No. In the recommendation itself, we state the exit condition. A position can be exited under 3 conditions

  • When the price of underlying reaches certain target price or
  • When the price of underlying reaches specified stop loss or
  • When maximum number of trading days to hold the position have passed or
  • When expiry day of the option is there

You have to keep track of live prices of underlying and option yourself.

Q: How to learn options trading?

Ans: Get free trail of techpaisa’s premium service here. Then as you receive live recommendations, do paper trades i.e., don’t place traded with actual money but note them as if you would have done while actually trade. Then follow the trade everyday till it closes.

If you have any other query, feel free to mail us at feedback@techpaisa.com

Good Trading!

Techpaisa Team.

Stay tuned for latest updates:

TATAMOTORS Option Strategy for August

5 years, 2 months agoComments closed

tatamotors options

Update (8th August 2012 9:40AM): Stop loss hit. Adjust positions. Buy 250 August Call at Rs. 6.8 and sell 260 August Call at Rs. 3.8 with a stop loss of Rs. 253 on TATAMOTORS stock price.

Today’s recommendation is on TATAMOTORS options.

TATAMOTORS has strong resistance at Rs. 235-240 levels.

TATAMOTORS’s volatility is expected to be rangebound.

Overall technical strength of TATAMOTORS is weak.

Call with maximum open interest is at Rs. 220.

We suggest selling TATAMOTORS 250 Aug Call options as our thesis on TATAMOTORS is that its going to be bearish/neutral. Aug 250 Call is trading at Rs. 2. If you trade 1 lot of options i.e. 1000 quantity, you will get a credit of Rs. 2000.

Our target is that option will expire worthless. Trigger you stop loss (that is, buy back options) when stock price of TATAMOTORS moves above 240.

Keep in mind that TATAMOTORS may be having an earning event in mid-august due to which volatility of options can rise temporarily.

We always recommend you to follow stop loss to avoid extending unnecessary losses.

Stay tuned for latest updates:

Happy Investing!

Techpaisa Team.

DISCLOSURE: I am short TATAMOTORS 250 Aug Call.

DISCLAIMER: If you trade stocks/derivatives, you do so at your own risk. Trading/Investing in stocks carry high risk. Any trade or action you take in the market is your own responsibility. Techpaisa.com will not be liable for any loss arising out of the use of any information on the website by anybody.

TATASTEEL Option Strategy for August

5 years, 2 months ago2 Comments

tatasteel options

Today’s recommendation is on TATASTEEL options.

TATASTEEL has strong resistance at Rs. 425-430 levels.

TATASTEEL’s volatility is expected to be rangebound.

Overall technical strength of TATASTEEL is weak.

Call with maximum open interest is at Rs. 420.

We suggest selling TATASTEEL 440 Aug Call options as our thesis on TATASTEEL is that its going to be bearish/neutral. Aug 440 Call is trading at Rs. 3.4. If you trade 1 lot of options i.e. 500 quantity, you will get a credit of Rs. 1700.

Our target is that option will expire worthless. Trigger you stop loss (that is, buy back options) when stock price of TATASTEEL moves above 430.

Keep in mind that TATASTEEL may be having an earning event in mid-august due to which volatility of options can rise temporarily.

We always recommend you to follow stop loss to avoid extending unnecessary losses.

Stay tuned for latest updates:

Happy Investing!

Techpaisa Team.

DISCLOSURE: I am short TATASTEEL 440 Aug Call.

DISCLAIMER: If you trade stocks/derivatives, you do so at your own risk. Trading/Investing in stocks carry high risk. Any trade or action you take in the market is your own responsibility. Techpaisa.com will not be liable for any loss arising out of the use of any information on the website by anybody.

SBIN Option Strategy in August

5 years, 2 months ago4 Comments

sbin options

Update (8th August 2012 9:32AM): Stop loss hit. Exit current position at Rs.68.5.

Today’s recommendation is on SBIN options.

SBIN has strong resistance at Rs. 2015 from 200 DMA and 2025 and 2080 from fibonacci retracement levels.

Call with maximum open interest is at Rs. 2200.

We suggest selling SBIN 2100 Aug Call options as our thesis on SBIN is that its going to be bearish/neutral. Aug 2100 Call is trading at Rs. 33.65. If you trade 1 lot of options i.e. 125 quantity, you will get a credit of Rs. 4206.25.

Our target is that option will expire worthless. Trigger you stop loss (that is, buy back options) when stock price of SBIN moves above 2080.

Keep in mind that there will be SBIN earning event in mid august which can increase the volatility in option prices but our bet is that SBIN has strong resistance at prices above Rs. 2000.

We always recommend you to follow stop loss to avoid extending unnecessary losses.

Stay tuned for latest updates:

Happy Investing!

Techpaisa Team.

DISCLOSURE: I am short SBIN 2100 Aug Call.

DISCLAIMER: If you trade stocks/derivatives, you do so at your own risk. Trading/Investing in stocks carry high risk. Any trade or action you take in the market is your own responsibility. Techpaisa.com will not be liable for any loss arising out of the use of any information on the website by anybody.

TCS Option Strategy for July

5 years, 3 months ago5 Comments

tcs options

Update July 11, 2012 (3:10PM): Exit positions. Sell TCS 1250 Jul Put at 45.5 and TCS 1300 Jul Call at 33.55. Total Profit without deducting brokerage is Rs. 2462.5.

Today’s recommendation is on TCS options.

TCS earning event is on 12th July 2012 and we are expecting volatility to move up from here before the annouoncment.

Call with maximum open interest is Rs 1300 and Put with maximum open interest is at Rs. 1250.

We suggest buying a strangle (1300 Jul Call and 1250 Jul Put) at this point. Jul 1300 Call is trading at Rs. 30.5 and 1250 Put is trading at 38.7. If you trade 1 lot of both options i.e. 250 quantity, you will need Rs. 17300 (Brokerage Extra).

This is a pure earning event trade and our target is that there is going to be a sharp move upside or downside. We suggest only waiting till 11th July End-Of-Day before earnings or 12th July EOD at maximum i.e. cut the positions by EOD 11th Jul or 12th Jul.

Watch this blog for more updates on this trade.

Stay tuned for latest updates:

Happy Investing!

Techpaisa Team.

DISCLOSURE: I am long TCS 1300 Jul Call and 1250 Jul Put.

DISCLAIMER: If you trade stocks/derivatives, you do so at your own risk. Trading/Investing in stocks carry high risk. Any trade or action you take in the market is your own responsibility. Techpaisa.com will not be liable for any loss arising out of the use of any information on the website by anybody.

BHARTIARTL Option Strategy in July

5 years, 3 months ago4 Comments

bhartiartl options

Update 12 July 2012 (2:38PM): Stop loss hit. Square off 300 Jul Put at 3.6 and sell 320 Jul Call at 2.8.

Exiting call option position at Rs. 3.7. Total loss in this trade Rs. 3100.

Today’s recommendation is on BHARTIARTL options.

BHARTIARTL has made an upmove recently and has strong support at Rs. 305 levels.

BHARTIARTL’s volatility is expected to be rangebound.

Overall technical strength of BHARTIARTL is good with a recent positive move.

Put with maximum open interest is at Rs. 300.

We suggest selling BHARTIARTL 300 Jul Put options as our thesis on BHARTIARTL is that its going to be bullish/neutral. Jul 300 Put is trading at Rs. 1.4. If you trade 1 lot of options i.e. 1000 quantity, you will get a credit of Rs. 1400.

Our target is that option will expire worthless. Trigger you stop loss (that is, buy back options) when stock price of BHARTIARTL moves below 305.

We always recommend you to follow stop loss to avoid extending unnecessary losses.

Stay tuned for latest updates:

Happy Investing!

Techpaisa Team.

DISCLOSURE: I am short BHARTIARTL 300 Jul Put.

DISCLAIMER: If you trade stocks/derivatives, you do so at your own risk. Trading/Investing in stocks carry high risk. Any trade or action you take in the market is your own responsibility. Techpaisa.com will not be liable for any loss arising out of the use of any information on the website by anybody.

Options Profit of Rs 8075 on Rs 2,30,000 in June 2012

5 years, 3 months ago0 Comments

options pnl june

We announce the results of our option trades using technical analysis of techpaisa. We made a profit of Rs. 8,075 (brokerage extra) on an investment of Rs. 2,30,000. Here is a list of trades we did:

Option Trades

This month, we tried an Iron Condor trade on NIFTY 2-month out expity options. Our observation is that it’s not worth to try Iron Condor on 2-month out expiry options as option premiums don’t go down significantly. It’s fine to use current month options and you will still get the same premium.

All other trades have done well except TATAMOTRS where stop loss got triggerred and we had to exit but we did’nt incur any loss in that trade either.

Stay tuned for option recommendations for this month.

Stay tuned for latest updates:

Happy Investing!

Techpaisa Team.

DISCLAIMER: If you trade stocks/derivatives, you do so at your own risk. Trading/Investing in stocks carry high risk. Any trade or action you take in the market is your own responsibility. Techpaisa.com will not be liable for any loss arising out of the use of any information on the website by anybody.

TCS Option Strategy for June

5 years, 4 months ago4 Comments

tcs options

Today’s recommendation is on TCS options.

TCS has strong resistance at Rs. 1295 from 52 week high.

TCS’s volatility is going down. Our take is that it’s going to be neutral/bearish.

Call with maximum open interest is at Rs. 1300.

We suggest selling TCS 1300 Jun Call options as our thesis on TCS is that its going to be bearish/neutral. Jun 1300 Call is trading at Rs. 10.25. If you trade 1 lot of options i.e. 250 quantity, you will get a credit of Rs. 2562.5.

Our target is that option will expire worthless. Trigger you stop loss (that is, buy back options) when stock price of TCS moves above 1295.

We always recommend you to follow stop loss to avoid extending unnecessary losses.

Stay tuned for latest updates:

Happy Investing!

Techpaisa Team.

DISCLOSURE: I am short TCS 1300 Jun Call.

DISCLAIMER: If you trade stocks/derivatives, you do so at your own risk. Trading/Investing in stocks carry high risk. Any trade or action you take in the market is your own responsibility. Techpaisa.com will not be liable for any loss arising out of the use of any information on the website by anybody.

TATAMOTORS Option Strategy for June

5 years, 4 months ago5 Comments

tatamotors options

22nd June 2012 (11AM) Stop Loss hit. Buying TATAMOTORS Jun2 260 Call option at Rs. 1.95.

Today’s recommendation is on TATAMOTORS options.

TATAMOTORS has gapped down after the earnings event and has strong resitance at 250 levels.

TATAMOTORS volatility is expected to go down.

Call with maximum open interest is 260.

We suggest selling a 260 Jun Call at this point. Jun 260 Call is trading at Rs. 2.05. If you trade 1 lot i.e. 1000 quantity, you will get a credit of Rs. 2050.

Our target is that option will expire worthless. Trigger you stop loss when stock price of TATAMOTORS moves above Rs. 251.

We always recommend you to follow stop loss to avoid extending unnecessary losses.

Stay tuned for latest updates:

Happy Investing!

Techpaisa Team.

DISCLOSURE: I am short TATAMOTORS Jun 260 Call.

DISCLAIMER: If you trade stocks/derivatives, you do so at your own risk. Trading/Investing in stocks carry high risk. Any trade or action you take in the market is your own responsibility. Techpaisa.com will not be liable for any loss arising out of the use of any information on the website by anybody.

LT Option Strategy for June

5 years, 4 months ago0 Comments

lt options

Today’s recommendation is on LT options.

LT has strong resistance at Rs. 1450 levels.

LT’s volatility is going down. Our take is that it’s going to be neutral/bearish.

Call with maximum open interest is at Rs. 1400.

We suggest selling LT 1450 Jun Call options as our thesis on LT is that its going to be bearish/neutral. Jun 1450 Call is trading at Rs. 10.4. If you trade 1 lot of options i.e. 250 quantity, you will get a credit of Rs. 2600.

Our target is that option will expire worthless. Trigger you stop loss (that is, buy back options) when stock price of LT moves above 1400.

We always recommend you to follow stop loss to avoid extending unnecessary losses.

Stay tuned for latest updates:

Happy Investing!

Techpaisa Team.

DISCLOSURE: I am short LT 1450 Jun Call.

DISCLAIMER: If you trade stocks/derivatives, you do so at your own risk. Trading/Investing in stocks carry high risk. Any trade or action you take in the market is your own responsibility. Techpaisa.com will not be liable for any loss arising out of the use of any information on the website by anybody.