Category: Advanced Option Trading

MarketSecrets - Learn To Trade Like a Pro

How to Calculate Weekly & Monthly MaxPain in single click using MaxPain Calculator Tool?

August 15, 2020

How to Calculate MaxPain for BankNifty, Nifty and Stocks using Brand New MaxPain Calculator?

MarketSecrets is proud to launch a new MaxPain calculation tool for Nifty, BankNifty and all the stocks.
You already know NSE is phasing out its old website and the data in the option chain page is not properly updated in the old website. This is especially true for BankNifty. For the last 2 weeks, it was completely down during market hours. So any tool which is accessing the old NSE website is useless.
Also, NSE had developed new website which prevents people from pulling its data easily. That’s why no-one is able to build a good MaxPain tool on the new website so far.
There are some Excel tools available now on the new website too, but you need to feed in cookie data manually almost every day, which is kind of tiring. Also, you need the latest version of Microsoft Office to use those tools.
But with our tool, you can get the MaxPain data in just few seconds, that too without any manual work.

We have built this tool from scratch. You need to pass 2 inputs.
1. Do you want the MaxPain data for Stock or Index. If you need it for stocks, you need to type “equities” here, if you need data for index like Nifty/BankNifty, you need to type “indices” here. I’m going to get MaxPain data for BankNifty, which is an index, so I’m typing indices.
2. 2nd input is the Symbol of the stock/index. In this case, it is BankNifty.
Now, click “Calculate MaxPain” button. Tool will automatically pull the data from NSE website, it will analyse the data and calculate the MaxPain.
You can just change the Symbol name and you can use it for any stock or indices. You can download this tool from our Website, completely free of charge.

How to Calculate MaxPain for BankNifty, Nifty and Stocks using Brand New MaxPain Calculator?

July 17, 2020

How to Calculate MaxPain for BankNifty, Nifty and Stocks using Brand New MaxPain Calculator?

MarketSecrets is proud to launch a new MaxPain calculation tool for Nifty, BankNifty and all the stocks.
You already know NSE is phasing out its old website and the data in the option chain page is not properly updated in the old website. This is especially true for BankNifty. For the last 2 weeks, it was completely down during market hours. So any tool which is accessing the old NSE website is useless.
Also, NSE had developed new website which prevents people from pulling its data easily. That’s why no-one is able to build a good MaxPain tool on the new website so far.
There are some Excel tools available now on the new website too, but you need to feed in cookie data manually almost every day, which is kind of tiring. Also, you need the latest version of Microsoft Office to use those tools.
But with our tool, you can get the MaxPain data in just few seconds, that too without any manual work.

We have built this tool from scratch. You need to pass 2 inputs.
1. Do you want the MaxPain data for Stock or Index. If you need it for stocks, you need to type “equities” here, if you need data for index like Nifty/BankNifty, you need to type “indices” here. I’m going to get MaxPain data for BankNifty, which is an index, so I’m typing indices.
2. 2nd input is the Symbol of the stock/index. In this case, it is BankNifty.
Now, click “Calculate MaxPain” button. Tool will automatically pull the data from NSE website, it will analyse the data and calculate the MaxPain.
You can just change the Symbol name and you can use it for any stock or indices. You can download this tool from our Website, completely free of charge.

How to generate weekly income through option trading?

February 29, 2020

How to generate weekly income through option trading?

Option Trading can be used to generate regular weekly income using simple MaxPain strategy. Let’s see it in detail.
Note: This strategy should be used only on Expiry day (or) 1 day before Expiry.

Step 1: Spot Price
Check and note down the spot price of the stock or index which you want to trade.

Step 2: Calculate MaxPain
Check the option chain open interest data of the selected stock or index. Analyse the open interest data and calculate MaxPain.

Step 3: Find MaxPain of nearby strikes
Once you find MaxPain and its strike price, check the MaxPain value of nearby strike prices and see whether any of the strike prices have closer MaxPain value.
If any strike prices have closer value, it indicates MaxPain strike price can change easily. In this case, you need to be very careful or avoid selling options.

Step 4: Compare MaxPain & Spot price
1. Focus on buying option – If difference between Spot and MaxPain is >200
2. Focus on selling option – If difference between Spot and MaxPain is <100 Consider MaxPain is at 32200, there are 3 Scenarios: 1. If BankNifty Spot is below 32000, Buy CE 2. If BankNifty Spot is above 32400, Buy PE 3. If BankNifty Spot is between 32100-32300, Sell PE & CE One of these 3 scenarios will happen every week, so you can easily use this strategy to generate weekly income by trading Nifty/BankNifty options.

Why you should never Buy Deep In The Money options?

February 15, 2020

Why you should never Buy Deep In The Money options?

Before we get started, let’s see what are the different types of option contracts available. Based on where the price of a stock is trading at, there are 3 types of option contracts available.
1. In The Money option (ITM)
2. At The Money option (ATM)
3. Out of The Money option (OTM)

Let’s see each type in detail.

In The Money option (ITM)
A Call option is called In The Money, if the strike price of the option is less than the current spot price.
A Put option is called In The Money, if the strike price of the option is greater than the current spot price.

Why you should never Buy Deep In The Money options?
There are 2 reasons:
1. You will need higher capital for trading, so it eliminates leverage advantage provided by options.
2. Deep In The Money option increases risk but generates same returns as that of In The Money option
So it doesn’t make any sense to buy Deep In The Money option for any trader and better to stick it In The Money option.

At The Money option (ATM)
A Call option is called At The Money, if the strike price of the option is closest to the current spot price.
A Put option is called At The Money, if the strike price of the option is closest to the current spot price.
At the Money option is the most actively traded instrument in the market.

Out of The Money option (OTM)
A Call option is called Out of The Money, if the strike price of the option is greater than the current spot price.
A Put option is called Out of The Money, if the strike price of the option is less than the current spot price.
Out of The Money option doesn’t have any intrinsic value and it only has time value. So if you consider this option expires right now, it will become 0.
Capital required for trading Out of The Money option is very low when compared to ATM & ITM options.
Out of The Money option are generally called Hero or Zero Trades. [i.e] There are the option multibaggers, which generates 2X, 3X, 4X & 5X returns of the capital.

Option Trading Basics

February 8, 2020

Option Trading Basics

Let’s see in detail about the option trading basics every option trader should be aware of.

Why Option Trading is Famous?
Where the money goes, people’s energy flows. Since 85% of all the market action and market money is concentrated on option trading, option trading is extremely famous.
Also, the capital required for buying option is too low, but profit potential is extremely high when compared to stock/futures trading.

Strike Price
Strike price is the various price points at which option contracts are available for each stock.
For nifty, we have strike prices for every 50 rupees. For banknifty, strike price is in multiples of 100.

Underlying Price
Underlying price is the spot price of the actual stock or index from which option price is derived.

Option Premium
Option Premium is the value at which option is currently trading. It is simply the Last Traded Price (LTP) of the option contract.
If you are an option buyer, you need to pay the option premium to buy options.
If you are an option seller, you can sell options and collect the option premium.

Option Expiration
Option Expiration denotes the date in which the option contact will go void/invalid.
In India, stock options generally expires on last Thursday of each month (has monthly expiry contracts) whereas index options expires on every Thursday (has weekly expiry contracts).

Hope this post helps you to understand the basics of Option Trading.

How to regular income through BankNifty Weekly Expiry Strategy?

February 2, 2020

How to generate regular income through BankNifty Weekly Expiry Strategy?

BankNifty Weekly Expiry can be used to generate regular weekly income with a simple strategy. Let’s see it in detail.
Note: This strategy should be used only on Expiry day (every Thursday).

Step 1: Spot Price at 1.00 PM
On Expiry day, Check BankNifty Spot price at 1.00 PM and note it down. Let’s say BankNifty Spot is trading at 32180.

Step 2: Select Strikes to Trade
Select the strike price just above and below the BankNifty sport price. Strike above the current price should be our CE and the one below should be our PE.
Since BankNifty is trading at 32180, we will select 32200 CE and 32100 PE.

Step 3: Entry Trigger
Place aorder to Buy both at 32200 CE & 32100 PE at 25 Rupees each. Your total investment will be 50 Points, which is 50*20=1000 Rupees.

Step 4: Target & SL
Your Target for this trade is 75 Points. If either CE/PE (or) combined premium hits 75 points, you can exit the trade. Your profits will be 25 points, which is 500 rupees.
Your SL for this trade is 25 Points. If the combined premium hits 25 points, you can exit the trade. Your max loss will be 25 points, which is 500 rupees.
If SL Hits, reverse the trade (Sell 32200 CE & 32100 PE, and collect 20-25 premium), you will earn 25 Points easily. SL for reverse trade is 50 Points

Note: You need to wait till 3.00 PM for either SL/Target. If neither target nor SL is hit by 3.00 PM, you can exit the trade.

What are the Option Trading Basics every trader should be aware of?

January 19, 2020

What are the Option Trading Basics every trader should be aware of?

Understanding the basics of options is very important for every trader even if you are not into option trading.

Here are the list of things every option trader should be aware of:
1. Option Buying has Low Risk and High Reward
2. Option Selling has Odds of winning at 90%
3. Option Trading is a game of Risk vs Odds
4. Focus on option buying during High Volatility Events (India Vix)
5. Beware of Theta (Time Val) in 2nd Half of Month
6. Naked Calls and Puts has Unlimited risk but profit is limited
7. During option Selling Use 10% Buffer from MaxPain
8. During One Side Selling, Avoid writing PEs and target CEs

How To Read Option Chain Open Interest Data Like a PRO?

January 19, 2020

How To Read Option Chain Open Interest Data Like a PRO?

Option Chain Open Interest Data is a highly significant information and if you know how to analyze and use it, it can give you a clear edge while trading.

Significance of OI Data:
1. You can find Resistance of a Stock using OI data
2. You can find Support of a Stock using OI data
3. You can find how a stock will move using OI Data
4. You can find whether support or resistance of a stock is getting stronger or weaker using OI Data

How to Analyse Intraday Open Interest Like a Pro?

January 18, 2020

How to Analyse Intraday Open Interest Like a Pro?

Option Chain Open Interest Data is a highly significant information and if you know how to analyze and use it for intraday trading, it can give you a clear edge.

Significance of Intraday Open Interest Data:
1. Why option chain analysis is important?
2. What is Call Buildup?
3. How to identify call buildup in open interest data?
4. What is put Buildup?
5. How to identify put buildup in open interest data?
6. What is MaxPain?
7. How to use maxpain data?
8. What is PCR/Put Call Ratio?
9. How to use PCR?
10. What is the significance of PCR at Strike?
11. How to find Intraday PCR Move?
12. How to use PCR to identify fake move im the market?
13. How to use NSE option chain?

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