10 Options Strategies to Know

The amount of money you put in is small i. Academy Articles for Level 2. Ignore the stock itself, I am not recommending a particular stock, just looking at a strategy. As an alternative to writing covered calls, one can enter a bull call spread for a similar profit potential but with significantly less capital requirement. But if you really want to test your hand at hedging then you can go for various hedging strategies.

Risk-Free Trading Let us discuss a strategy that allows as risk-free trade as possible due to the fact that traders buy two options in Option+ mode at the same time in different directions, and then sell one option in order to benefit from each.

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Commision Expenses are not included in this strategy. Iam using Options oracle to generate this strategy. I thought that probably it would test the next support zone of But it surpassed above i.

Which probably also makes the trade fail. Some Problem with the strategy tool. Looks some problem with the strategy. Current Maximum Loss will be Another is you can hedge between stocks of the same sector with the same expiry in future. Other is if you are good at option trading then go for market strategies like butterfly ,box,straddle etc.

In this you will have a fixed loss but open profit. Also there are many many strategies that are individually followed by different people. Lastly what ever you do just do only if you feel comfortable. This page may be out of date. Save your draft before refreshing this page. Submit any pending changes before refreshing this page. Ask New Question Sign In. What is the best option investment strategy with minimum risk and decent returns?

What is the best no risk investment plan for INR 50lakhs giving minimum return of per month? What is the best place to invest a monthly amount around 5k to get maximum return with low risk? What are the risks? The simple answer would be: There is no such strategy. I had earlier answered a similar question. That answer should serve as response to this question as well. I hope this answers your question.

When is the last time you checked your credit score? Start monitoring your credit! Sign Up at transunion. You dismissed this ad. The feedback you provide will help us show you more relevant content in the future. Thank you for your feedback! Often there's hedge cost involved as well. So allow me to rephrase your question. As you may have noted, I have deleted " best " and " riskfree " There is no such thing as best strategy else everyone would be following that.

You need to identify your own trading style, develop a trading plan. So lets head the other direction. In theory, a riskless position can be constructed from buying a stock, selling a call option, and buying a put option.

This combination should earn the risk free rate. Selling the call option means you get money now but agree to let someone else have the stock at an agreed contract price if the price goes up. Buying the put option means you pay money now but can sell the stock to someone at a pre-agreed contract price if you want to do so, which would only be when the price declines below the contract price.

The example has shares for compatibility with the options contracts which require share blocks. According to google finance, if we had sold a call today at the close we would receive the bid, which is And if we had bought a put today at the close we would pay the ask, which is Given that it is difficult to actually make these trades simultaneously, in practice, with the prices jumping all around, I would say if you really want a low risk option trade then a bank CD looks like the safer bet.

This isn't to say you can't find another combination of stock and contract price that does better than a bank CD -- but I doubt it will ever be better by very much and still difficult to monitor and align the trades in practice. By coincidence, I entered this position today. Ignore the stock itself, I am not recommending a particular stock, just looking at a strategy.

The risk is shifted a bit, but in return, I give up potential higher gains. In a flat market, this strategy can provide relatively high returns compared to holding only stocks. By clicking "Post Your Answer", you acknowledge that you have read our updated terms of service , privacy policy and cookie policy , and that your continued use of the website is subject to these policies.

Questions Tags Users Badges Unanswered. Ellie Kesselman 2, 1 15 Benjamin 6 Check out this site: Let's compare two scenarios: Cart 4 6. Holding cash equal to the underlying's notional value, plus buying an at-the-money call option, is economically equivalent to buying a put to hedge a current position in a stock. In both cases the option cost is going to eat up your returns, on average. You can't just buy the upside on stocks without taking any downside, it costs money to buy the upside and the money it costs on average is "a lot" enough to eat up your upside on average.

My friend is highly successful with this strategy.

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Rajendran Sir, Can you guide for some Risk free option Strategy which may not give profit for 6 months in a year and give a decent profit for 6 months in a year. Reply. Harjeet says. February 6, at pm can we make profit in f&o without any loss with your risk free f & o trading strategy. Reply. sarvesh says. To start our risk free trade, buy Google stock, GOOG, at the Oct 3 Close: x sh = $49, The example has shares for compatibility with the options contracts which require share blocks. May 04,  · I just found a free money options strategy. % risk free, you won't believe your eyes. Lets say you have a stock trading at $ Write a put against the stock, strike $45, and sell the option for $