So I hope you are enjoying this series and today’s video is going to give you a lot of information, information that will be useful to you from today itself.
See we are going to discuss option strategy in the upcoming video and we will see, understand, learn and apply many option strategies.
So today in this video, the sequel to the previous video, if you don’t know we are in a series in which we are learning about options, option trading in detail, then on the I button and on the end screen of this video, you will get the link to the complete playlist.
There is a free playlist in which you can learn options from beginner to advanced level.
Now we will start and understand what does option strategy mean.
What does strategy mean?
See when you just buy options, suppose your view is bullish and you have bought a put option or you have sold a put option, here you have bought or sold, we simply call it a trade in naked options.
This means you have traded in naked options, in simple words it is called trading in naked options, but when you have a strategy, you can do a lot with different options.
You can create many strategies by buying and selling options and there are many strategies, but now we will go to the next link.
The way we understood delta and theta in the previous video, on the same link.
We have to use delta in our favor, use theta in our favor and you will understand which strategy can be used for this.
So I come to the screen for you.
Now understand this, now if you have two types of thoughts, either you are bullish about the market, the market will go up or the market will fall from here.
It may also happen that you are neutral about the market, neutral means the market will go sideways.
You can have different strategies for every kind of direction, opinion, analysis.
It may also happen that you feel that the market is very volatile, then how will money be made in all these ways, we will understand.
So for now, our scenario is that it is bullish with the market.
Now we are on Wise, you will find the link of Wise in the description comment box.
You can also use Wise if you want.
So here is a strategy, see, before explaining this strategy, you have to understand the basic concept.
When we buy a call option, it is beneficial to go above the market.
When we sell a put option, it is also beneficial to go above the market, but here our profit is limited.
So we talked last time that when people sell any option then what is the biggest challenge for them that here is the fund requirement, we need Rs 100000, if we are selling any option and when we buy, the fund requirement is very less.
For example, if you want at Rs 6000, you can trade in one lot, but now here is a strategy.
We will understand Bull Call Spread later, first let me explain Bull Put Spread.
So if you see carefully, when you sold the Put option you were making a maximum profit of 4% and your fund requirement was Rs 100000. Now we will understand this new concept like this but as soon as you have sold the put option, you have still sold the put option, the same at the money, you have sold the put option at the money, you sold 18250 here also, when you sold here also you sold 18250, but here its price was 100000 rupees and we were earning 4%, now we will sell, we will play fast, while selling the put option we have sold the put option, but our fund requirement will be less, only 29000 rupees are being spent, if you were selling only the put option then your loss was also unlimited, meaning if the market starts falling from here instead of rising then your loss can be unlimited, how much loss can there be, you were earning 4000 but if the market falls then if you sold just one lot then you can have a loss of 13000-15000 rupees, even more than that, so if the market keeps falling then you will have a loss here There will be a loss, someone will incur loss and someone will make profit, so who will benefit, the one who has bought the put option has unlimited profit on the fall here, so whatever comes out of your pocket will go into someone else’s pocket. Okay, now we stick to our concept, we were selling put option, we could earn 4% by investing 100000, but now what I am telling you, if you want to sell, then what do you do, here you do not just have to sell, you have to buy while selling, listen carefully, you do not just have to sell, you have to buy while selling, this is also called hedging and here a strategy comes out, we talked about strategy, in strategy, first of all when we talk about option strategies, the first strategy that you should learn is to make a spread, what is spread, spread means whenever spread is written anywhere, then you will make a spread from anyone’s mouth, so you should understand that spread means that we will buy and sell, similarly here also we will buy and sell, this is called making a spread,