Trading Options using Spreads

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In this video of the Face2Face Series, we have with us Mr. Vivek Bajaj, co-founder of StockEdge and Elearnmarkets, who will engage in a candid conversation on Options with Mr. Vishvesh Chauhan, an opportunistic options trader. In current market situation, options trading has become a popular investment avenue. In this video, we will discuss the right ways to make money in options trading. We will first discuss the importance of seizing opportunities in the options segment rather than choosing the buyers’ or traders’ side. 

Moving on, Mr. Vishvesh Chauhan will talk about his background and the chain of events that led him to start trading in the market and work with options. He mentions the importance of building confidence, a system and a money management process in the stock market. We will highlight how options are a great way to consistently make profits with some real-life incidents from Mr. Chauhan’s life. We will also discuss the significance of risk management in trading and investing. We will also highlight how the Sharpe ratio can help us understand how much risk-adjusted returns we earn in the market.

 Mr. Vishvesh Chauhan will explain the risk-reward implications of this ratio with some practical examples. Next, we will discuss the criteria which Mr. Vishvesh Chauhan uses to decide the fair value of the option price. We will talk about the components of extrinsic value and how volatility affects fair prices. There are three important things for all options traders to keep in mind while trading – Delta (the direction), Vega (the volatility) and Theta (the timing). Mr. Vishvesh Chauhan discusses how these Greeks should be utilized to get the best trades out of the market at a time when the market is suffering from the effects of a pandemic.

With practical examples, we will discuss the significance of the volatility curve. We will talk about how the implied volatility (IV) has changed due to the downturn in the market. Mr. Vishvesh Chauhan will also share a strategy which can help options traders from a conceptual point of view. Next, we will move to a discussion about keeping positions till expiry. Mr. Vishvesh Chauhan will show us the answer to this question through an example of his own trade.

Vishvesh Chauhan in Face2Face

Your Speaker

Vishvesh Chauhan

Vishvesh Chauhan, A renowned name in Quant and Derivatives trading in the country. He is highly regarded for his views and ideas on prime business channels (Zee Business, CNBC Awaaz, Bloomberg Quint, CNBC TV18). Vishvesh is a software engineer and MBA Finance with CMT Level II (MTA, USA). He holds a certification in Applied Mathematics from the Indian Institute of Quantitative Finance. He has been associated with top brands like BNP Paribas formerly known as Sharekhan, Standard Chartered, and Reuters over his decade long career. He has headed a prop book trading desk in his previous assignment, generating alphas in all kinds of market scenarios.
Mr. Vivek Bajaj

Your Host

Vivek Bajaj