Top 5 Nifty Options Trading Tips
List a few tips for trading Nifty options?
Nifty is a stock index which was initiated by the National Stock Exchange, India. The index points out the market performance, supported by which trading can be made.
Some of the nifty tips are mentioned below:
1. When the market is at a low point, a large profit can still be made by trading nifty options. A nifty put option makes profit when the market is downward, so by buying a nifty put option during a down trend in the market scenario, traders can make profit with a low risk value. The risk of such an option trading is constrained to the premium paid to buy the option while the profit can be without limit if it is carried out right. Investing the right amount is vital. A rule to be followed is to buy such a nifty put option when the market oscillation is in the direction opposite to that of a short-term trend.
2. Nifty option trading technique relies on the strike price chosen by the trader. The strike price of a nifty option has a lot to do with the days left for expiration. Based on far or near the trader is from the expiration date of the option, they can either choose out of money or in the money options, correspondingly.
3. Another nifty option is that traders can assist is that when there are no oscillation due to global market scenario, share market news, results or even important release dates. Primarily, traders find a nifty option that has the highest open interest. The same is carries out after a certain time interval. If the market condition is in range and still be short of major fluctuations, that approach must be executed. The traders take short option on the picky nifty call and nifty put options which have revealed the highest open interest. This strategy uses time perish; hence the risk can be higher than profit if not traded neatly.
4. Traders go for long be on both sides of strategy when it comes to nifty option; both put option and call option. Both call and put options are bought at the same point of time, same strike price and they have the same expiration date. The nifty option is going to make profit in such a long stand astride strategy if the position moves sharply, above or below the strike price. The risks in such trading are restricted and profit is limitless.
5. Nifty options are most money-making when the expiration date is near, as the options premium for time.