"Naked Option Trading - Weekly Profits Using Price Action | Pravin Khetan"
Learn how to trade naked options using price action strategy.:
- Price action is the direct analysis of price charts without indicators.
- Filter stocks based on price action to make informed trading decisions.
Identifying double top pattern on Federal Bank chart:
- Filter stocks using price action and scan the chart for chart patterns
- Use marketinout.com or topstockresearch.com to scan the stock chart for patterns like double top
Consider strike price selection based on target achievement and premium size:
- Choose out of the money contract for large targets, in the money contract for small targets
- Aim for a contract with a delta of at least 0.80 and a premium of Rs. 80 for a Rs.1 move
- Select a contract with a close price and low premium compared to the strike difference
Choosing a deeper in the money strike price with at least 0.80 delta for better target achievement.:
- Consider the target achievement timeline when selecting the strike price.
- Use a broker like Mstock for naked option trading to avoid high brokerage fees.
Execute option trades easily and efficiently on M-Stock:
- M-Stock is a well-established and registered company with SEBI, NSC, and BSA in India
- The platform allows users to execute trades with ease and offers user-friendly features like alerts and stop loss
Buying a strike price can help reduce losses as the price increases.:
- As the price increases, the strike price goes towards ATM or OTM, increasing the time value.
- The more we lose in intrinsic value, the more we gain in time value, reducing the loss on increasing the price.
Choosing the right strike price based on target:
- Consider strike price 149 if the target is not very high
- Consider strike price around 145 if the target is very high
Trading strategy involves taking advantage of price drops and setting stop loss levels:
- A big drop in price resulted in increasing the premium of certain strike prices
- Small drops can still yield returns, while out of the money options may not be profitable