Beginner-Friendly Option Trading Strategies
Let us now study some beginner-friendly option trading strategies in detail.
Covered Call Strategy
Best for: Investors who already own shares.
Market Outlook: Neutral to slightly bullish.
How it works:
Buy or hold 100 shares of a company.
Sell (write) a call option on the same stock.
Example:
You own Infosys shares bought at ₹1600.
You sell a call option at strike ₹1700 for ₹30 premium.
Outcomes:
If Infosys stays below ₹1700, you keep the ₹30 premium (profit).
If Infosys rises above ₹1700, you must sell shares at ₹1700. You still make profit because your cost was ₹1600.
Pros:
Generates steady income.
Low risk.
Cons:
Your profit is capped if stock rises sharply.
Educational takeaway: A covered call is like earning rent on a property you own.
Protective Put Strategy
Best for: Investors who want insurance for their portfolio.
Market Outlook: Bullish, but with fear of downside risk.
How it works:
Buy shares of a company.
Buy a put option for protection.
Example:
You buy TCS shares at ₹3600.
You purchase a put option with strike ₹3500 for ₹50.
If TCS falls to ₹3300, your shares lose ₹300. But your put option gains value, limiting your losses.
Pros:
Acts like insurance.
Protects against big losses.
Cons:
Premium cost reduces net return.
Educational takeaway: A protective put is like buying health insurance—you hope not to use it, but it provides safety.
Let us now study some beginner-friendly option trading strategies in detail.
Covered Call Strategy
Best for: Investors who already own shares.
Market Outlook: Neutral to slightly bullish.
How it works:
Buy or hold 100 shares of a company.
Sell (write) a call option on the same stock.
Example:
You own Infosys shares bought at ₹1600.
You sell a call option at strike ₹1700 for ₹30 premium.
Outcomes:
If Infosys stays below ₹1700, you keep the ₹30 premium (profit).
If Infosys rises above ₹1700, you must sell shares at ₹1700. You still make profit because your cost was ₹1600.
Pros:
Generates steady income.
Low risk.
Cons:
Your profit is capped if stock rises sharply.
Educational takeaway: A covered call is like earning rent on a property you own.
Protective Put Strategy
Best for: Investors who want insurance for their portfolio.
Market Outlook: Bullish, but with fear of downside risk.
How it works:
Buy shares of a company.
Buy a put option for protection.
Example:
You buy TCS shares at ₹3600.
You purchase a put option with strike ₹3500 for ₹50.
If TCS falls to ₹3300, your shares lose ₹300. But your put option gains value, limiting your losses.
Pros:
Acts like insurance.
Protects against big losses.
Cons:
Premium cost reduces net return.
Educational takeaway: A protective put is like buying health insurance—you hope not to use it, but it provides safety.
Hello Everyone! 👋
Feel free to ask any questions. I'm here to help!
Details:
Contact : +91 7678446896
Email: skytradingmod@gmail.com
WhatsApp: wa.me/7678446896
Feel free to ask any questions. I'm here to help!
Details:
Contact : +91 7678446896
Email: skytradingmod@gmail.com
WhatsApp: wa.me/7678446896
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Hello Everyone! 👋
Feel free to ask any questions. I'm here to help!
Details:
Contact : +91 7678446896
Email: skytradingmod@gmail.com
WhatsApp: wa.me/7678446896
Feel free to ask any questions. I'm here to help!
Details:
Contact : +91 7678446896
Email: skytradingmod@gmail.com
WhatsApp: wa.me/7678446896
相關出版品
免責聲明
這些資訊和出版物並不意味著也不構成TradingView提供或認可的金融、投資、交易或其他類型的意見或建議。請在使用條款閱讀更多資訊。