Fundamental Analysis | Technical Analysis | Futures & Options | Study-Corner || Contact || Long Term Portfolio ||

Learn Option Trading

  at 5:51:00 PM
Share this post ..

Option contract is an agreement between two parties ie buyer and seller. when that contract is made,these two parties are agreeing to buy/sell the mentioned underlying asset ( it can be a stock/index) at the mentioned price(strike price),on a particular day (expiry day).

The option buyer pays a particular amount of money (option premium) to the option seller to make this contract.There is no obligation for the buyer to execute the transaction on expiry day, its optional (hence the name option). While the option seller has the obligation to execute the transaction, if the contract expires as "in the money". If the option expires as Out of the money ie worthless, the option seller gains the full premium.
Option basic concepts 

>Basics-of-Option-Trading > Must read for beginners
>Option-trading-basic-terms-explained
Option buying Vs Option selling
>Options exercising-and-squaring-off
>Option buyer and seller, formula to calculate profit at expiry
Intrinsic value,extrinsic value and time decay
>Margin requirement for option writing
Hedging future positions with options
Option advanced concepts
Option Greeks - how does option price changes with underlying ?
Option premium calculation , Fair value, over priced and under priced options
>Option pricing and implied volatility
Option pain theory
Put call ratio analysis
>Understanding the volatility index (India VIX)
Put call parity and other option arbitrage methods
> Portfolio hedging with options, perfect neutral 
Gamma and reverse gamma scalping

Option Trading Strategies
 Bullish Strategies       
 Long call
short put
covered call
Covered straddle
>Synthetic long stock
Bull call spread
Bull put spread
Bull call diagonal spread
Bull put diagonal spread
Long bull collar
short bull collar
call calendar spread
Call ratio spread

Bearish Strategies 
Short call
Long put
covered put
>Synthetic Short stock
Bear call spread
Bear put spread
Bear call diagonal spread
Bear put diagonal spread
Long bear collar
short bear collar
Bear Put calendar spread
Put ratio spread
Neutral Strategies   
>Long strangle
>Short strangle  
Its not complete, will update soon.