Read on Twitter
As a beginner if you are starting to trade stock options selling few important points u can refer.
1. Trade only highly liquid stocks (list i have posted sometime back on my timeline).
2. First understand ur trading phychology and decide trading style (speads or naked)
1. Trade only highly liquid stocks (list i have posted sometime back on my timeline).
2. First understand ur trading phychology and decide trading style (speads or naked)
3. Decide your position size ( for beginner max leverage should not be more than 2.5x would suggest prefer 2x)
Example : Trading with 20L capital
Then keep 50% capital free in begining.
Divide 50% capital into 4/5 stocks.
Example : Trading with 20L capital
Then keep 50% capital free in begining.
Divide 50% capital into 4/5 stocks.
Divide stocks such that u ll have 20-25% diversification to single sector.
For example :
1 lot AXISBANK (BANKING)
1 lot INFY (IT)
1 lot m&m (Auto)
1 lot RIL (OMC & TELECOM)
This way chances of gaps in all stocks at once will get reduced.
For example :
1 lot AXISBANK (BANKING)
1 lot INFY (IT)
1 lot m&m (Auto)
1 lot RIL (OMC & TELECOM)
This way chances of gaps in all stocks at once will get reduced.
Divide stocks as per 3 categories
Bullish
Bearish
Sideways
If market is bullish then keep 50-75% position bullish and 25-50% position sideways.
If market is sideways then keep 75% position sideways and keep rest 25% free which u can use if market takes directional move.
Bullish
Bearish
Sideways
If market is bullish then keep 50-75% position bullish and 25-50% position sideways.
If market is sideways then keep 75% position sideways and keep rest 25% free which u can use if market takes directional move.
I personally avoid trading bearish market much as those moves will be very quick and big but bears won't stay for longer duration so in bear market i go on vacation & come back when bulls return
.
.
If you follow this things mentioned u will rarely face blackswan events while trading stock options.
One good advice if you are trading non-directional positional then strangle is always better then straddle (easy to adjust).
One good advice if you are trading non-directional positional then strangle is always better then straddle (easy to adjust).
Increase position size to 4x leverage once u get conviction into ur trading system.
Personally i avoid few sectors PHARMA, TELECOM & OMC (don't tell me RIL is telecom as well as OMC
).
Hopefully this will help to start as a beginner.
Personally i avoid few sectors PHARMA, TELECOM & OMC (don't tell me RIL is telecom as well as OMC
).Hopefully this will help to start as a beginner.
