We get numerous queries about how to start on with the “Options trading”?
Many people get attracted to options trading because it offers lot of advantages for traders.
You get leverage to trade large number of shares with not much capital requirement.
Your losses are limited while profits can be unlimited.
There are numerous options strategies that one can use for different market environment or trends.
For various market conditions you can employ options strategies depending upon your risk profile – low risk, moderate risk and high risk Trading plans.
As a beginner I recommend people to start with low/moderate risk strategies. For few days you don’t even need to put actual capital. Start learning about implementation of option strategies with paper based trading. Choose stocks which have high liquidity means which has a high volume on any given day.
For starters best is Nifty options; it’s the highest option traded index in India. It gives lot of trading opportunities in a single day. To pick right entry and exit points one need to learn few basics of technical analysis. We have digital learning modules for technical analysis as well as options trading.
Other advantage of Nifty options trading is that because of small lot size the amount of capital required is also small. One can even start trading in Nifty options with capital of just Rs. 20000 and with right strategies you can make Rs. 30000-40000 per month. This is good enough for a newbie trader, right?
Important thing: To maximize your profits you need to have a low brokerage plan. Brokerages eat up lot of profits. In India there are few firms like Samco, Zerodha which have low brokerages for trading. Open your trading accounts with any of the good low brokerage firm.
So what’s stopping you? Get started, try Options Trading for good profits.
Do share your trading experiences below.