Thursday, 18 July 2013

FUTURE & OPTIONS TRADING STRATEGIES-1



                                                     FUTURE & OPTIONS STRATEGY          
                                                                       Strategy 1.

Simple Strategies

Following are the two simple strategies

a)      Buy Call: - If you are bullish then you should buy call of ITM or ATM or OTM depending upon the confidence you have in bull trend and the capacity of the risk you can afford. It is better to buy the call on fundamental and technical studies of an underlying stock.
Buy call when following patterns appears in technical analysis of the underlying stocks or index.

1)      Falling wedge
2)      Rising triangle
3)      Bottom head & shoulder
4)      Double Bottom
5)      Rounded Bottom
6)      Rectangle breaking upward line
7)      Flag
8)      Short term moving average breaking upward with relation to the long term moving average.

Buy call when the corporate announces good result or when it announces some extra ordinary news for eg. When reliance industries announce its gas discovery, on such day you should buy the call either ATM call or OTM call.
 
             
b)      Buy Put: - If you are bearish then you should buy put of ITM or ATM or OTM depending upon the confidence you have in bearish trend and the capacity of the risk you can afford. It is better to buy the put on fundamental and technical studies an underlying stock

Buy put when following pattern appears in technical analysis of the underlying stocks or index

1)      Rising Flag
2)      Head & Shoulder Top
3)      Double Top
4)      Rectangle breaking downward Line
5)      Rising wedge
6)      Short term moving average breaking downward with relation to the long term moving average.

And such types of pattern.

Suggestions:

Do not buy call or put simply on the words of tipsters, please consult your investment advisors before buying call or put of an underlying instrument. Study the technical and fundamental analysis of the underlying instrument.

      Please do not keep the habit of buying deep out of, the money option, because most of the deep OTM expires without any profit.

   
MY FINANCIAL PLANNING
PRADEEP S CHOKHANI
(DERIVATIVE  EXPERT)
CPFA, AFP
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