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