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Option Trading Lottery Strategy Long Strangle | Share Market Knowledge - YouTube
Channel: Pushkar Raj Thakur: Business Coach
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Let us teach you today that if there is a
lottery ticket inside the stock market, then
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what is that lottery ticket strategy and you
will say that the lottery ticket?
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It is such that we give a very small price
and we can get the jackpot from it, so if
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you are feeling that you have to earn the
jackpot from the market then you can use the
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long strangle, see just like we talked in
the last strategy about the market, we have
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no view, but we are feeling that there is
too much volatility in the market and either
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the market can rise a lot or it can fall a
lot, and I want to earn money in both the
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cases and how you will earn and I will just
tell you in this strategy and why I am calling
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this strategy lottery ticket, because the
straddle I have told you before this and when
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you were longing the straddle in the straddle
then you was buying at the money options and
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at the money options are expensive or you
tell me that out of the money options are
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expensive and you will say that sir at the
money options are more expensive than out
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of the money options and In the money options
are more expensive than At the money options
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then which are the cheapest options, Out of
the Money and if we want to buy the lottery
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then can we buy the lottery of Out of the
Money then you will say that we can buy and
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if we can buy then what we do in the Straddle,
now we are talking about buying and we are
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talking about long then we buy call option
and put option in the straddle but we buy
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it on
At the Money, but what we do in the strangle,
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in the strangle we do not buy on At the Money
Options but we only buy the options of Out
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of the Money, now let's understand the meaning
of Out of the Money and if Nifty is ₹17300
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here for example then you tell me that if
I talk about 17100 and if I am buying put
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option then what will happen, it will be in
the money or it will be out of the money and
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if you are saying that you are buying the
put options then 17100 is Out of the Money
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and it is the OTM, very nice you said right
OTM and if it was call then it would be In
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the Money and if I talk about call option
and we buy the call option when we think that
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market will rise and there will be profit
and if i write 17500 here or i write 17600
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here then this is OTM option, Out of the Money
option and if you purchased the Out of The
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Money option here then you will get money
if the market fall too much or market rise
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too much, now you can get very much loss in
this strategy if the market will remain sideways
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or if it will rise very less and if movement
is not come very much and market will remain
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sideways then you will lose and otherwise
if in the market, what you think that markets
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can be very volatile and markets can rise
a lot and fall too much and If something can
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happen a lot in the market then you can earn
money by using this strategy and why am I
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talking in lottery ticket because I told you
that Out of the money options are cheap and
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Now I will give you example on the screen
and In the last video I told you that when
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you were making straddle then the at the money
options you have bought and sold then what
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was your investment, let me show you, our
investment on straddle was 10303 but we are
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not learning Straddle now because we have
already learned it in the last video and now
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we are talking about strangle, right now our
premium is going around 3600 and why so because
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see here, Nifty is around 17300 so here 17100
and 17500 and we have bought put option and
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call option here.
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The options of Out of the Money are cheap
so our investment will be approximately 3600
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and 3685 then it is around 3600 and 3700 and
Max profit is unlimited here.
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Now if anything like this can happen here
in the market and if the market can rise too
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much or fall too much then your maximum loss
according to one lot will be because you have
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bought one lot here then it will be around
3600 and 3700 and your maximum loss will be
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around 3685 and you can earn an unlimited
profit, you see if market fall too much even
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then you can earn a lot of money and your
investment was around 3600 and you can earn
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around 50000 and Similarly, if the market rises,
even then you will see the same that you can earn
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a lot of money here and If the market reaches
at 18630 then you can earn ₹52000 and you
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can earn ₹ 52815 on expiry and Now what
is happening here?
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Why are you earning this money because when
this market will reach here and suppose we
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talked about 18630 then the option we bought
of 17500, that will be In the Money at that
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time and it will go In the Money and who is
above will become zero, so I bought one lot
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in 49 and one lot means 50 then 50*50, I purchased
the put option of 2500 and the put option
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I bought, suppose I have loss of 2500 in the
put option but if market will rise then 25*50,
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I have not invested any money and that money
can earn ₹50000 for me then here you are
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understanding that if market will break too
much here, then what will happen here, it
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will be same if market breaks and Suppose
market came to 16070 and If the market has
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come to 16000 and market fall then here your
17100 will go In the Money and it will go
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In the Money then there is a value in In The
Money and the price of In the Money gets increased
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and if price of In the Money will increase
then according to that because the quantity
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which you bought, its money if it increases,
then here you can get benefit of 50000 but
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it happens less in the market and That's why
if you look here, the probability of profit
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is only 28% and the probability of selling
was high, it was 70% and here you can see
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that it is only 28% because so much movement
in the market and if we don't even talk about
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so much and if you will not get movement in
the market only then you will get loss and
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you have bought already Out of the money option
put option here on 17100 then if the market go
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to 16980 and if it is intraday strategy then
it is not necessary that you hold it till
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the strategy and you can hold but it is not
necessary and you will do it in intraday then
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here 5000 here almost you are getting profit
of 6000 then you can have profit also on same
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day then you can have profit on the same day
and may be that Nifty is running different
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at your time and price of premium is different
at your time so you can log in on sensibull
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as there is a link in the description
and in the comment box and you can see that
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what is the cost of this strategy and you
can earn unlimited money but again you need
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to have this clear in your mind that what
are you thinking and what do you think that
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where market will go at this time and it is
not necessary that Market will go up or down
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but you are using this strategy when you are
feeling that anything big can happen in the
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market and this can happen on any special
event I have given an example that it can happen
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at the time of election or at the time of
budget and if anything big is going to happen
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in the market then because of that the market
can fall a lot and can rise a lot and you
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will earn money in both ways, then you understood
both the strategies till now. When we talk
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that we did not have any view and anything
can happen in the market then you can long
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straddle and strangle and you will Short both
of them when you feel that market will remain
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sideways then what you find best in this video,
you can tell me in the comments below and
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if you have questions then ask in the comments
and you can like this video to give your love
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and you can open your demat account today
if you have not demat account till now then
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there are links of leading brokers in the
description and in the comments box and finally
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if you are watching this video on Facebook
then follow and if you are watching on YouTube
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then subscribe and click on Bell icon and
i will see you in the next video and you share
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