OPTION TRADING: A GUIDE FOR BEGINNERS

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Options trading may seem overwhelming at first, but it's easy to understand if you know a few key points. Investor portfolios are usually constructed with several asset classes. These may be stocks, bonds, ETFs, and even mutual funds. Options are another asset class, and when used correctly, they offer many advantages that trading stocks and ETFs alone cannot.

KEY TAKEAWAYS

• An option is a contract giving the buyer the right—but not the obligation—to buy (in the case of a call) or sell (in the case of a put) the underlying asset at a specific price on or before a certain date.
• People use options for income, to speculate, and to hedge risk.
• Options are known as derivatives because they derive their value from an underlying asset.
• A stock option contract typically represents 100 shares of the underlying stock, but options may be written on any sort of underlying asset from bonds to currencies to commodities.
  
  

Why Use Options:-

Speculation
Speculation is a wager on future price direction. A speculator might think the price of a stock will go up, perhaps based on fundamental analysis or technical analysis. A speculator might buy the stock or buy a call option on the stock. Speculating with a call option—instead of buying the stock outright—is attractive to some traders because options provide leverage. An out-of-the-money call option may only cost a few dollars or even cents compared to the full price of a $100 stock.

Hedging
Options were really invented for hedging purposes. Hedging with options is meant to reduce risk at a reasonable cost. Here, we can think of using options like an insurance policy. Just as you insure your house or car, options can be used to insure your investments against a downturn.
Imagine that you want to buy technology stocks. But you also want to limit losses. By using put options, you could limit your downside risk and enjoy all the upside in a cost-effective way. For short sellers, call options can be used to limit losses if the underlying price moves against their trade—especially during a short squeeze.

NIFTY LEVEL PREDICTION FOR TOMORROW 10 FEB 2022

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During today's trading session, the market opened on a gap-up note and showed strength throughout, closing at 17463 level with a gain of 197 points and Bank Nifty at 38610 level with a gain of 581 points. Currently, the index has support at 17200 levels and resistance at 17600 levels, while Bank Nifty has support at 38000 levels and resistance at 39400 levels.
The retail investor continues to show optimism on market dips. While we are seeing FII outflows, we are seeing positive inflows from domestic investors as well. It is always advisable to buy on dips for better rupee-cost averaging that  results in good long-term outcomes.The positive trend in dynamic flows is also encouraging, as most asset-allocation models maintain a balance of debt and equity allocation to take advantage of market corrections and rise in equity allocations.We will be watching closely tomorrow's RBI policy announcement since rising domestic inflation and tightening policy by global central banks are likely to influence the central bank to take a similar stance. 

RESISTANCE	R1	R2	R3
	17541	17596	17756
SUPPORT	S1	S2	S3
	17381	17276	17116

STOCK FUTURE TODAY'S PROFIT 27100/-

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AXIS BANK FUT 1ST TARGET ACHIEVED A@ 808 BUYING CALL GIVEN FROM 804 BOOKED PROFIT OF 4800

ESCORTS FUT 1ST TARGET ACHIEVED @ 1853 BUYING CALL GIVEN FROM 1843 BOOKED PROFIT OF 5500

INFY FUT 1ST TARGET ACHIEVED @ 1745 BUYING CALL GIVEN FROM 1730 BOOKED PROFIT OF 8250

TATA MOTORS FUT BOTH TARGET  ACHIEVED @ 501 /504 BUYING CALL GIVEN FROM 498 BOOKED PROFIT OF 25650

STOCK FUTURE CALLS FOR 09 FEB 2022

 BUY INFY FUT 2 LOTS ABOVE 1730 TG 1745/1760 SL 1714

BUY ESCORTS FUT 2 LOTS ABOVE 1843 TG 1853/1863 SL 1832

BUY AXIS BANK FUT 2 LOTS ABOVE 804 TG 808/812 SL 799

BUY TATA MOTORS FUT 2 LOTS ABOVE 498 TG 501/504 SL 494

NIFTY FUTURE PREDICTION FOR TOMORROW 09-FEB 2022

Markets ended marginally up in a highly volatile trading session, taking a breather after the recent fall. The benchmark again fell after a flat start, however major indexes bounced back to help the index regain its losses. In the end, the Nifty index closed around 17,266 points.In terms of sectors, a mixed picture was observed where real estate, capital goods, and industrials ended with losses, while metal and PSU banking indexes posted modest gains. In the broader markets, both midcaps and small caps ended lower by 0.8% and 1.8%, respectively.Since the Union Budget, we've seen a rollercoaster ride and the coming MPC meeting is likely to keep volatility high. Additionally, global cues also don't look good, so participants should continue to take a cautious stance and limit leverage position.

RESISTANCE	R1	R2	R3
	17357	17459	17715
SUPPORT	S1	S2	S3
	17101	16947	16691

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26250/- PROFIT BOOKED IN INTRADAY NIFTY BANKNIFTY TODAY

NIFTY FUT BOTH TARGET ACHIEVED 17170 / 17050
 SELLING GIVEN FROM 17250

BOOKED PROFIT OF 10000

BANKNFITY FUT ACHIEVED BOTH TARGET 37799/37549
SELLING CALL GIVEN FROM 37999
BOOKED PROFIT OF 16250

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NIFTY FUTURE CALLS FOR 08-FEB 2022

SELL NIFTY FUT 2 LOTS BELOW 17250 TG 17170/17050
SL 17530

SELL BANKNFITY FUT 2 LOTS BELOW 37999 TARGET 37799/37549
SL 38349

NIFTY FUTURE LEVELS PREDICTION FOR 08 FEB 2022👍

During today's session, the market started weak and selling was accentuated throughout, as the market closed at the 17213.60 level with a loss of 302.70 points. The Bank Nifty ended at 37995.45, a loss of 793.90 points.
Since the last three trading sessions, the Nifty has been trading with lower highs and lower lows, indicating weakness in the counter for the time being. Further, the index has broken below the rising trend line and is trading below the middle band of Bollinger bands, which suggests downside movement in the stock.
Stock markets were under pressure as strong US jobs data led to fears of steeper than expected rate hikes by the Federal Reserve, resulting in a spike in bond yields. Due to domestic inflation and global central bank policies tightening, there is a high likelihood that the market will remain volatile.

RESISTANCE	R1	R2	R3
	17455	17697	18104
SUPPORT	S1	S2	S3
	17048	16883	16476

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