How to trade Bank-nifty Options and make money?

How to gain big profit by trading in Bank-nifty Options ?
Trading is an art, which can be improved by money management, risk management, study and patience with discipline. While Bank-nifty is most volatile instrument with a major liquidity in options and futures to trade, it has few pros an cons also.1) Quick movement: 100-120 point quick move in matter of 5/10 minutes is most of times observed in Bank-nifty and which causes a good move in futures and its related option pricing. It has both advantage and disadvantage depends on which side you are present. 
2) Weight of HDFC bank ICICI and Kotak decides the overall show for Bank-nifty, HDFC Bank carries approx 30% followed by ICICI 16% and Kotak 12% . You need to keep an eye on these stocks also while trading in Bank-nifty.  Movement of HDFC Bank alone also can bring 100/150 point move in Bank-Nifty and hence study of pricing pattern of it also important for entry and exit of Bank-nifty!
3) Options trading: While buying in options comes with pros and cons both, if one can get quick movement on their side, options trade can reward you 20/30 or even 50/60% gain on your capital in a day on average 200/250 point move in Bank-Nifty on other hands it can also take out 20-50% of capital from your A/c on same day. So while doing options, one has to make sure nice entry on such a level that post that 50/100 point move should happen on our side in next few 15/20 minutes at least and this way you can also prevent option prices going against you. 
4) Stop loss and Money management: Most important part of trading is not technical analysis but money and risk management, you need to cut of emotions and book whatever gain and loss that you have prerecorded while entering in the position. You should not have two thoughts and hope especially that if your options prices drop, now after few minutes in a rally we will exit and vice versa.
5) Discipline and position sizing: One of other major factor for consistency is your trading discipline and size of a position. You need to follow certain rules about your consistent size of position that at least for 10 trades do it with same quantity and follow strict SL and entry exit that you have decided. 
Common Avoidable Mistakes: There are most common mistakes such as 1) Averaging: It can turn out to be a nightmare and only on hope you will loose your capital till Thursday expiry. Options are not meant for averaging and one has to keep control on urge and follow set rules in it.
2) Strict entry and exit: Option price rapidly move inline with spot rate and hence strict entry and exit one must follow and not try many fancy things with it..
3) Position size should be common and do not try sometimes 200/400 and 600 such quantities. 
If one follow such rules, keep intact discipline and control greed in few months time you will start seeing better results for you,
At Equity Analytics, we are SEBI Registered Analyst, and experienced in fundamental and technical study of markets. We also advise trading in intra-day and nifty options, you can check our products on and get back to us!! 

Page 1 of 1

Leave a Reply

Your email address will not be published. Required fields are marked *