Traders with a less amount of capital work in the nifty option where you pay only the premium amount and can start trading with a normal amount of Rs 10,000/- only. Say if you are looking to buy Nifty 11500CE @ 100. That means ( Lot size of the nifty option is 75) So here you are paying Rs 100*75= Rs 7500 for buying a call option. Options trading is for the Risk appetite traders and not for the conservative traders, Because in the options market you may double your capital in a day or you may lose your entire capital also on the same day. So here its always recommended to be careful while trading in nifty option tips.
Types of Nifty option
Nifty option is of 2 types:
1.Call Option – When the market moves up, the call option will increase, so if you look the market up you need to Buy call Option, and here we recommend you go always for the in the money call option buy. In the money, at the money and out of the money call option will be discussed by us in next articles.
2.Put Option- When the market move down, the put option will increase, so if you look the market down you need to Buy the Put Option and here also we recommend you take at the money put option only. As mentioned above in the money, at the money, out of the money these topics will be covered in the next article.
There are lot of confusion among the traders because they keep looking at breakouts in the options market which is completely wrong, here you need to understand is that we always need to keep eye on Nifty Spot and according to nifty spot breakout we need to take a position in options market. For example – If we get a breakout in nifty @ 11500, so here we need to buy a Nifty 11500 CE, not when nifty 11500CE breaks 110 need to buy that. Option market moves according to spot level, not spot levels moves according to option market. So this is the first mistake which was done by basic as well as advance traders.
Both futures and options are most profitable in their own ways, it all depends on which strategy you follow for trading. If you are a beginner then its very difficult for you to understand option chain marker and to convert your spot position into the options market, so here we recommend you to start your trading with future market or if you want to start in option only then you can start with our bank nifty option tips. In the next case when you are advanced traders and have complete knowledge about the option market then its better for you to go into the options market,as there you can trade with less amount of capital and gain a big amount. Either you are a beginner or advanced trader, make sure you keep proper SL and TGT in all your tips. Never make any trade without proper SL and Tgt.