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Option Selling With Low Capital - Live Trading In Fyers - YouTube
Channel: POWER OF STOCKS
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Hello friends, welcome back to my channel this is Subhashish.
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Today I am going to demonstrate how
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you will need less margin for option selling
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because when I talk to people I get 2 questions,
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we have less money so we do options buying
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and option selling can be only done with more money.
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This should not be the definition.
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When we see the opportunity we can do option buying,
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if you think that you can get easy money or some percentage should come back,
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then we can do options selling.
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See, why I am telling you options selling because
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intention is to be present in the market.
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If you short 25 quantity, 1 lot you short, you may not get lot of money,
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but market will have to go a lot opposite to you to erode your capital.
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So what will happen due to this is you will be present in the market longer.
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So I am going to tell you a solution today how you can do buying and selling both
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so that your capital is utilized well, many people don't know this.
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So I will use Fyers terminal. Why I recommend Fyers to people?
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First thing, there is a 30 days challenge also and I will tell in details at the end.
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Let's say you win in the initial stage
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then definitely some brokerage will be returned to you.
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This amount will be between 5000-10000, it will be returned if you win this.
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30 days so you don't have to wait for a long time,
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you just have to be profitable for 30 days.
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And one more point, in this you will directly get options chain here.
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It will be easy to utilize it, but today our concept is not this.
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What features it has I will tell you in the future.
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Those who want to open an account, one more point,
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now its anuual maintenance charge is 0, account opening charge is 0.
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If you don't want to trade, it's fine but if you open an account,
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possibly in the future if there are more features,
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at that time it will be easy for you to trade because
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annual maintenance charge will be 0 till 31st January.
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That's why I am making this video so that you can utilize this offer.
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Link is in the description box you can go there and open an account.
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So I will tell you some points. I do a right click here, open Options Chain,
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I want to reduce my margin here. So what will I do?
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Let's imagine that I want to go deep out of the money.
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Deep out of the money I will buy some options first,
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so let's see, here I first buy let's say 100 quantity put options.
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Why I buy I will tell you, first I buy here and call option let's imagine I
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somewhere around
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it is around 4 rupees, 100 quantity according to intraday I buy this.
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I could have bought it in margin also. So now if I want to sell option,
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let's imagine I want to sell option 75 quantity,
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I sell call and here I get around 40 rupees, I sell 75 quantity, okay?
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So this many trades I did, we can see here it is 4 quantity, correct?
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So this means that my intention is not to earn these 40 rupees,
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I am not teaching you setup, I am teaching you how we can take margin benefit.
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Now if we see funds, my fund was somewhere around 9 lacs,
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now we see 1 lac 63 thousand is used.
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How many quantity I shorted? I shorted 3 quantity, 1 lac 63 thousand is used.
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That means what was always in your mind, to short 1 lot I need 1.5 lacs or 1.4 lacs,
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this never happens if you hedge and take position.
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Here what has happened? It's a hedged position. If you see the position,
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I did buy, I did sell put, and in between 75...
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And what can be the profit in this? If you calculate exactly,
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more than 5000 can be your profit.
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If let's say you are right, then you will get 5000 profit on a capital of 1.5 lacs.
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So this is more benefit, whenever you sell options if you want to take margin benefit
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then this more than 2x or 3x you get here.
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Means the leverage we used to get before, it's the same leverage
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but you have to just take an additional order.
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What is the benefit in this I will tell you.
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Let's imagine now I am getting profit of 300 rupees.
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If I hold till day end I can get upto 5000 but this setup is not exact
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you can make combinations and permutations,
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do you want to short in 1 rupee and earn 5 rupees.
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What will happen due to this is you can sell options tension free
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and you can identify option buying. If you think today you have 2 lacs,
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3 quantity options you sell, now if you need,
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let's imagine here if I am watching the market now
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I think it can go on the buying side,
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I think it can go on the buying side, so what I will do,
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if I buy at the money, if I see call of 38100 here
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let's imagine call is now at 123 rupees,
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if I can see that the market can go on the buying side, I can buy also.
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If I have 2 lacs capital, I have also shorted 3 lots
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and if I see momentum I can buy also. If I buy,
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this margin will go down drastically and in that short momentum
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if I get money in buying, then no doubt, I will get money on both sides.
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If we see here, we'll wait, we'll make a condition in the market we want to buy.
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If we want to buy, atleast if it goes above this green candle then we'll buy,
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this is our condition if it goes above this then we'll buy
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just to demonstrate to you that if you do option buying in 2 lacs capital,
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then you can take benefit on both sides. I hope you understand my point.
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Smartly use it and whether it's Zerodha, Alice Blue, Astha, I have traded in all.
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In Alice Blue when there was margin I have traded,
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when Astha gave 10x margin I traded. As a beginner trader I always recommend
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the way your costing is less. Here your account opening charges will be 0,
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0 annual maintenance charges and second thing, you can trade directly from the chart.
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Here I think that I will buy it. I can directly buy it'll reduce your timing
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and one more option you will get here, you will get Option Chain directly,
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you don't have to go anywhere again and again,
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annual maintenance charge is 0 so you don't have to pay any money.
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This is the best time offer that you buy and hold, means open an account and keep.
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So now if we see, imagine I am buying here, how much quantity I'll buy?
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I buy 50 quantity. Why I buy? I think market will go reverse form here it'll go up.
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I buy 50 quantity.
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Just see the margin right now,
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let me see the margin, 1 lac 67, that means I can buy options and sell also.
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Now I am getting profit of 400 rupees in option buying, I will close this
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because we thought 500 rupees is profit, our option buying is over in 50 rupees.
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That means on 2 lacs you can do all things, option buying, selling.
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I hope this point you have understood that
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in less money you can do options buying and selling both.
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That means if I reduce the quantity here, if I short only 25 quantity instead of 75,
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and here if I buy call and I buy put of some option, that means in the end,
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it is possible that in not even 1.25, in 50000 I learn option selling.
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What will happen due to this is there will be confidence in your mind
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if you are made as an option buyer or option seller.
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I always recommend in intial stages trade with 30000 or 40000,
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but if you learn how to trade smartly, then it is possible that
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at 60000 or 70000 you take 1 lot options, here I have sold 3 lot options,
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you can learn to sell 1 lot, so that your on screen time is increased,
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even if you get less profit, percentage of return if you see here, you will get 3-4%
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but imagine you see a momentum after 12 o'clock,
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like we identify if a momentum is seen, then you can also buy because
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you will have fund left. If you want to really trade slowly, save quantity,
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then always trade in combination, whenever you see a momentum you can buy,
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but otherwise this easy money that you see 400-500 rupees, you can earn in less money.
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So I will tell you overall in the end, let's say I like to sell this in naked,
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in the sense, without any hedging. I need 1,47,000 that means
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if 1,47,000 is in my account then I can sell first. So your intention should be what?
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First you should buy, what will happen after buying? You will get margin benefit.
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So now in 1.47 capital you could sell just 1 lot, now in 1.6 capital,
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if you see here, in 1.63 capital we did 3 lots short.
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That means we have taken more than 2x or 3x margin benefit, which we used to get before.
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Similar kind of margin we were able to utilize here.
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I hope this point you have understood. To those who don't know this,
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you can utilize, this is kind of a strangle postion.
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Before we made strangle position this way, we made 40 rupees strangle now,
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maybe you can make straddle, if you go for straddle, maybe you will need less money
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because you will have more premiums. Maybe you want to go deep in the money,
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let's imagine you buy 1 rupee option and sell 5 rupees option, so net to net
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you just get 4 rupees multiplied by the quantity size.
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So these permutations combinations you can save, and always remember one point,
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options selling is not done because you have more money,
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options selling is done because market can go sideways, you can see,
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market doesn't have space. When you see breakout scenario you can plan directional,
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because I earn most money in directional. But in 1 or 2 days, I had told you that
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market can go sideways. If we see the market now,
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don't you think yesterday's high is here, yesterday's low is here,
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market has opened in the middle. So to cover the market from here will be difficult,
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so option sellers will continuously make straddle and strangle,
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after 12:00PM-12:30PM you will have an option,
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you can clear your position in profit or wait. So this is the best time to do straddle.
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So that's why I tell you again and again that try to unerstand things.
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When both sides market has space... means a support and resistance is made,
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then market doesn't have a big space, then you can utilize your capital well.
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Now if you buy option here then you will have to exit in 2-3 rupees,
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so instead of going in and out again, better you wait.
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Maybe upto 12:30 market comes here and after it comes here after 12:30,
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option buy can also be beneficial to us. But right now it's option selling space
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and for option selling lot of money is not required, like I told you here,
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400-500 rupees you get right now, maybe around 12:00PM we get around 1000-2000.
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After that, again after 12:30PM it is giving a breakout for option buying,
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then we can convert it into buying position and square off this position.
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How you utilize your money, only then you can become a trader.
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I hope you understand my point. If you want to open account in this,
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link is in the description box, so that first you buy out of the money.
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Always remember that if you want to short call option, CE you want to short,
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then first buy CE out of the money, then the difference will be your net gain.
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If this you sold at 10 rupees and bought at 2 rupees, that means you get 8 rupees,
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so 8 rupees will be your income, but if you are buying out of the money and
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selling at 10 rupees, margin will go down drastically.
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So because of this, you can increase quantity size.
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I hope you understand this point. That's why I suggest time and again that
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money is less or more, plan on both sides, practice with 1 lot,
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so you can have an idea if you are made for option buying or option selling,
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or on which day you should buy and which day you should sell,
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this as many times as you practice...
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Now market will have to make a big drastical move to make a big loss.
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If I have 1.5 lac, if I get loss of 10000 in this position, then I can bounce back.
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But if I buy, say now I can buy 200 quantity, if it goes 10 points, 2000 rupees will go.
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And here if it goes minimum 50, 60 or 70 points against me, then my 10000 will go.
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So it's always better that slow and steady you learn the game.
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Recommendation is not that you sell or buy option, recommendation is identify the market
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and learn selling also, learn buying also, so that you will get more money,
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means you can get more money from your capital.
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Hit the like button if you want to identify where, in which condition
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you should make option strangle or straddle. I will tell you some benefits
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how you can make it, hit the like button.
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I am not saying we will be correct 100%, but some parameters we can make
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where we can leave a condition on the market,
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if market is between this range or this much swing, or if market is between both swings,
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then we can make it straddle or strangle or we should plan directional.
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So some hint I will tell you in coming time so that if you are buying or selling,
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on both sides you can understand the market and trade.
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Like we were discussing in the morning, 38400 here and this, it opens in the middle
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so market can be slightly sideways and in between that it is running now.
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And in the end we see we have utilized about 1.5lac and we get profit of 3000 here.
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because buying scenario is not seen. If it had crossed high or low, I could have planned.
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But just to demonstrate, this is not a strategy, it is
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how much useful it will be if you utilize your capital correctly.
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For this, this is the video and I will exit this, this is the best part, if you see
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in which segment you want to off, intraday, margin, or in all segments you want to off,
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you just need to click a single button, all things exit from here at the same time.
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So 3000 profit we got, if nothing, we got 1% return and market was sideways,
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but yes, from this you get to learn instead of where to buy, where to sell.
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So after 12-12:30, like we plan to buy, you can plan that and
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in the middle if you see strangle or straddle or one sided directional,
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you can plan it to utilize. Link of Fyers is in the description box
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if you want to open account in this, there are lot of benefits, and
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that's it for now, if you like the video then like and share with friends.
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Thank you.
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