Difficulty Level: Basic
The video begins with why Options trading is a lucrative and a different aspect of the stock market compared to others. Most of the people who trade or invest in the financial markets use fundamental or technical analysis to analyse the markets. But when it comes to the execution of the trades, options become a very good support tool for the trader for speculation as well as hedging.
The basic requirements of an option trader:-
All these provide an important and efficient setup for profitable trading in the options markets.
The trading setup can be a 2 screen setup or a 4 screen setup. A person has to be very focused while he is trading. The setup should be in such a way that the trader can see all the prices that he wants in real time and live. 4 screen setups are for advanced traders who required more information for trading. They see their charts, their excel sheets, their trading account and all other information together at the same time.
The knowledge of the margin requirement of trading in options is an essential part of options trading. The prominent characteristics of margin in derivatives trading are:
In the second part of the video, He has described the application of the The Options Calculator. The options calculator is not like an ordinary calculator. The given sample of the options calculator has the following dropdowns in sequence:
It calculates the Option price, Volatility, the Option Greeks such as Delta, Gamma, Theta, Vega and Rho. It takes the futures value as the input value. Option prices are made of time value and intrinsic value. The calculator helps the trader to determine the time value and prices the options accordingly. Hence understanding about time value and volatility etc comes only through it.
The third video comprises the impact and criteria of how the Security Transaction Tax (STT) is calculated and charged by the brokers has also been discussed in the video. Security Transaction Tax is charged by the exchange if the option contracts held by the trader expires In the Money (ITM Option).
Hence, by the end of the videos, it can be concluded that Options are a wonderful tool for traders to place their bets for all types of markets - trending/sideways. How traders can take advantage of liquidity in the options, how to trade USDINR options, whether trading in options near expiry are too risky, all of these and much more can be concluded from the course of How to Trade Options.
He has an In-depth understanding of options including management of Greeks of plain vanilla options portfolio. He is a Senior Options Strategies and Trader with Kredent Finance. He also loves teaching and is a visiting faculty on various financial subjects at B-Schools. Also involved in knowledge development at Kredent Academy. He has also been awarded the title "Sensex ka Sultan" for being the winner of the City Round of Zee Business Sensex ka Sultan, powered by BSE Investor’s Protection Fund
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