Stock market is one of the greatest wealth generators for investors. In fact, learn how to invest in share market if the trading is done in a right way, the capital can grow manifold. Thus, it is very important to have the right knowledge and skills to carry out stock trading.
List of Easy Nifty Option Trading Strategies India | How to invest in share market
Buying call options are one of the easiest and popular ways to enter option market. This strategy is popular because the loss is very less and profits are high.
When the traders feel that the market will go against the views of the call option buyer they buy put option. In fact, it is bought with the belief that the price of the stock will move downward. Furthermore, it is one of the most favourite trading styles for those who like speculation and short selling in the stock.
Bull Call Spread
Bull Call Spread Strategy involves buying a call option at a specific price and selling call option at a specific higher strike price. In this, the trader expects a moderate rise in the price of the stock. The profit and loss in this strategy depend on the closing price of the stock on the day of expiry of the contract.
Option trading formula for bull call spread strategy = Contract Size [(Cost Of Per Share In Call On Expiry) – (Initial Premium Paid Per Share)] + Contract Size [(Premium Collected Per Share) – (Cost Of Per Share In Call On Expiry)]
Bear Put Spread
This strategy is exactly the opposite of the bull call spread. In fact, in this formula, the trader buys a put option at a specific strike price and sells the identical number of puts at a lower strike price. Here the trader holds a bearish view on the stock and believes that the stock price shall fall moderately.
formula for bear spread = Contract Size [(Cost Of Per Share In Put On Expiry) – (Initial Premium Paid Per Share)] + Contract Size [(Premium Collected Per Share) – (Cost Of Per Share In Put On Expiry)]