Option Action – Options Analysis Tool for Indian Markets
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Futures was more popular among the two until the market meltdown in after which the popularity of options has increased tremendously, much more than futures today. Following are the reasons which probably attributed to the increase in popularity of options on the NSE:.
For holding a future position, you would need NSE stipulated margins which would work upwards of Rs based on what future contract you are trading whereas in options a trader with even Rs in his account could take some kind of an option position. Future positions have unlimited risk, whereas in option buying the risk is limited to the premium you are paying. STT Security Transaction Tax charged by the government for Future is charged on the contract value whereas for options it is charged on the option premium.
Option Strategy is a tool which we have introduced on Zerodha Trader which suggests you and helps build option strategies. Find following brief on how to use it: Login to ZT and make sure you launch plus while logging in. Option Strategy tool, based on your view suggests you various option trading strategies and their payoff graphs. As an example, if my view is that nifty will stay in the range of and for this expiry NOV First step is for you to add all the nifty option strikes in this range on your market watch, so add — Calls and puts with November expiry.
Visit this blog to know how to add options onto market watch. Once you give a view the tool will suggest you 5 different strategies, as shown below. For the example, my view is that nifty will stay between to for Nov expiry. My View is that market will remain neutral that means neither bearish nor bullish and I also feel that market will be in a very narrow range.
This suggests me 5 different strategies as shown in the pic below. If you are not able to see the prices in the strategy section, click on the restore button as shown below. The window will look like below when you click on the restore button and the prices should start refreshing as the data is fetched from your market watch. So Ensure that the option contracts mentioned is available on the market watch as mentioned in point 2. See the Pic below:. Once you have decided to take an option trade, if it involves writing options selling optionsuse the Zerodha SPAN calculator to know the exact margins required.
Positions like the above will have margin benefits as they are partially hedged. But when you write options i. So to sell calls of nifty first and then buy back you would need almost 30k for an overnight trade. This margin goes down for a strategy mentioned in the above pic because the various option postions are counteracting each other.
Yes you can trade naked options i. Use this tool to help setup option strategies, study the payoff graph and proft trading options at Zerodha. Madhan, we give margins for option writing intradaypretty high actually. Hi sirfor option writing in Bank nifty Weekly Options for overnight Position what is the margin required, i have checked in calulator it is showing around per lot is this the right margin for overnight Position in option writing ……….
Hey Venky, the margin requirements are defined by our RMS team based on the liquidity and prevalent market conditions. The weekly option contracts do not have enough liquidity to afford very high leverage. Sir am new to it,am holding a account in zerodha,I want to learn the strategy of trading plz do refer for it,to whom I have to contact.
Suggest you to look at this: Interesting tool very helpful for people like me who trade on options. So that I can open 2 or more graphs. Arm, the above would be beneficial to people who have an understanding on options. If I have 1L in my trading account, can I do the following option strategy. Sell 3 contracts of Bank Nifty March put for Buy 3 contracts of Bank Nifty March put for I want to hold the position for few weeks.
Please tell if my thinking is correct. Margin required for only writing put per lot is Rs For taking 3 such positions, you will need 45k in your account. The way you have calculated margin requirements is wrong, that is why we have introduced http: Thank you very much for the prompt reply. I was wondering if you guys could open an official forum for Zerodha members so that we could help each other out instead of disturbing the faculty.
Hello, Is there a way we can exercise the options in Zerodha Trader? If so, can you please tell me how to do it? All options on NSE today are european now, which means you can exercise it only on the expiry day. In any case on the expiry day all options get exercised by default, so need to have this facility as long as the options are european. In PnL 3rd screenshot in this write up only the Net premium paid is shown and not profit potential. How to check the profit potential?
How to add my own strategy, if not available now, please make it available soon. Last is basically the last traded price and best is basically the best available price. If both are the same, the result will show the same. In the payoff graph, and pay off, break even is missing, which is a key factor in determining which strike price to be taken for trade.
The pay off graph is not showing the pay off in between the strike price, say nifty atcorresponding pay off is not showing, which is also vital. Abrar, Feedback taken, let me bounce it off my tech team and see how much time they will take to sort this. Also there is a error in bearish strategy, instead of market wont fall, it should be market wont rise.
Hi… I want to sell one lot put and one lot call. Is this for intraday or shall i carry till expiry… If that is for intraday, how much should i have to carry til expiry? Hi Kindly go through the following scenario: Nifty trading at then took Iron Condor as follows: Yes Sreejith it will be, you cannot hold opposite positions of same contract on a single trading account. In equities, this can be done only on an intraday basis.
For Futures, you can sell and hold until expiry by paying the margin amount for holding that short position. Option writers may not necessarily own the asset but they still take on the obligation to deliver the asset if the conditions are met for which they receive a small premium from the buyer of the option.
Dear Zerodha team, I cannot see the implied volatility figures for options. The pop up window shows all values as zero. How can I sell the lot I bought back at ?
Do I need to open a sell order for that or can I simply square-off the position like in equity? Go to Admin positions and click on the open position and say square off, this will sell it at market. Could you tell me where is it located in that page? Or is it not visible during off-market hours? The starter pack is free of cost which includes option strategy, charting, and more. There are certain products on Plus which are paid, you can see more here: I have never traded a option but i want to do some trade in it.
For example Nifty CE was trading at around in morning. So to have profit shall i buy call or put option? And i know call is like long and put is like short position. So if market is bullish i shall buy call and if market is bearish i shall sell puts?
I am actually having a big doubt among the 4 thing And one more thing lets say Nifty CE is trading at then what margin i require to have a long position? Phew, you are starting at the very basic. Buy Calls, if the market goes up, premium will ideally go up and you can profit. But there are days when market could go up but calls premium could loose you money when the implied volatility drops, for example today, even though market is up call premiums are down.
When you buy calls, profits are unlimited but the risk is limited to the premium you pay. You can Short puts, when market goes up, put values will come down and hence if you are short puts you can profit. When you short options, the risk is unlimited and profit is limited to the premium you receive when you short the option. Since the risk is unlimited, a margin is blocked in your trading account similar to futures.
Long calls and short puts, ideally will make you profit when market goes up, but they are completely different in terms of how you make money and similarly with long puts and short calls. Nitini am new to this fieldthe link which you have provided doesnt have any pdf ,which can explain options and its characteristics.
Have you checked out Varsity? Our education initiative, has become quite popular. Hello sir please make me understand Buy price and buy average price and how is buy average price related to settlement price and why it changes on daily basis of options?
Confused with your question Praveen. If you buy 1 lot at Rs 50, your buy price will show 50 and buy average price will also show If you buy the second lot at Rsyour quantity will show 2 lots and your buy average price will now show 75, which is the average of 50 and I just cant understand how my buying Average price shoot upto On the trading platform, your profits for today will show based on the closing price of the options for yesterday and not based on your buying price and this is the reason you are seeing a loss and not profits on the platform today.
No there is no daily settlement on buy option positions, so if you bought on 29th May Rs will get debited from your account and when you sell at 80, Rs is credited to your account.