Options Trading Strategy

Options Strategies

Stock Options Strategies

Key Points to remember:

1.   The stock should have gained 5 / 10 / 15 / 20% from previous Fall

2.   The stock should have fallen 5 / 10 / 15 / 20% from previous HIGH

3.   Target should be half of the rally/fall, say 5% for 10% rally or fall.

4.   Note Rollover statistics.

5.   Note Open Interest Statistics, windup calculations.

6.   Remember to note the Volatility – Daily, Monthly, Yearly

7.   Identify potential Upside / Downside Target

8.   Identify the Strike Prices between LTP & Target Price

9.   Calculate the BEP

10.  Calculate the Potential Profit.

11. Calculate the Stop Loss Price. General Rule is Maximum 50%  

            of our price.

12.  Calculate the Investment amount and Return %

13.  Don’t Buy more than one lot or keep some fixed amount for

      options.

14.   Remember that Options are meant for destructive. The whole  

      capital may vanish.

15.   Calculate the Days to Expiry.

16.   Confirm that you can wait till the target is achieved, or expiry

17.    Feed Target Price and Stop Loss GTC Orders.

18.    Wait for Major Event or Minor Events in Markets, as they   

       are best to trade in options.  Earnings, Announcements,  

       Unsure of the direction .

19.      Aim at a Trade.

20.      Gain the profit.

21.      Repeat the above.

22.   Dont Trade Options if you can not  Repeat the above.