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Long Straddle Option Trading Strategy | How to Make Money from Share / Forex / Crypto Market? - YouTube
Channel: Pushkar Raj Thakur: Business Coach
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Well till now we have learned such options
strategies that we can use when our view about
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the market is that the market is going to
rise and it will be Bullish or market will
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fall, it will be bearish or if it will be
sideways then you have learned all those strategies
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but now we are going to talk about that if
I have no view, I don't know whether that
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market will go up or it will do down, either
it can go up too much or it can go down too
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much so there can be a lot of volatility in
the market, so if there is a big movement
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will come in the market then I have to earn
money from it. Then if you are going to see
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a tremendous moment in the market and you
feel that the market will go up or down from
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here and I don't know where it will go, so
if it will rise and whether it falls, even
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if the market rises or If the market falls,
I want to earn money in both ways, then which
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strategy you have to use.
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You are going to learn that in this video,
the name of this strategy is Long Straddle.
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Now we have already talked about Long Straddle,
but let me tell you from the beginning what
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is the meaning of Long Straddle.
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Long means that you are buying the position
and straddle means that for at the money
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if you are trading on the index, suppose Nifty
is at 17300 then if it is on 17300, it is
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At the money then if you are doing long you
will buy call or put option of it.
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When you have to Short it, you have to Short
it when the market will remain sideways, but
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here we are feeling that either the market
will rise too much or it will fall too much,
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Here less won't work, why not because
you can lose money in this strategy when
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the market becomes sideways or if you are
feeling that the market will remain sideways
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then you will not long straddle then you will
short the straddle.
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What is the second way by which you can earn
money that there was a moment in the market
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but the market has grown only a little and
has fallen only a little?
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You have not seen very many fluctuations in
the market, then you can lose money, so if
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the market will remain sideways or if a little
movement comes in the market, then you will
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lose the money, nowhere the concept you have
understood, what you have to do long straddle
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is that we will buy call or put on At the
money, what will happen with that, wherever
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the market goes, you are going to get money.
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If the Market falls or market rises, I will
show you exactly on my screen so that you
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will understand the things, now we come on
sensibull because I use it to build the strategies,
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you can also log in on it, there is a link
of sensibull in the description and comment box
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Now see here, here profit is unlimited.
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You can make as much profit as you want.
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Look at the example here nifty is going on
around 17300 so closing happened at 17277,
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now here we bought the Call option as well
as put the option on At the Money, so we have
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taken one example here.
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You can increase or decrease the lot according
to your budget, so you don't need to trade immediately.
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You can also do paper trade here and there
is also the option of virtual trade and if
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you want to execute the trade because whatever
broker you have an account with, whether it
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is Angelone, whether it is Upstox, or be it
5paisa, and whether it is Zerodha.
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Here you will click on Trade All, then when
you click on Trade All here, you can also
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place your order directly from here.
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Now look here, if you understand a little
graph here, now if we take the market here
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in the middle, then our maximum loss in the
market here is 17300, but if the market will
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remain here, whereas when we had shortened
the straddle then our maximum profit will
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happen if the money closes on At the Money.
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So whoever is selling, will earn the maximum
profit if there is movement in the market.
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Now see here, no matter how much the market
breaks down.
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You say break as much as you want because
if the market comes to 16430 here then you
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are going to earn 33000.
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If the market falls more and it comes to 16000
then you are going to earn ₹ 53000.
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How much was your investment, is your net
premium, 10303 and you will lose maximum is
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also 10303 because here your premium can be
zero if the market will not move, so your
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maximum loss is 10000, but if the movement
will come in the market then you can earn
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any amount and if the market will increase
and it will come to ₹18430, then you will
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earn ₹45000 and if it increases more than
that and it comes to 18690 then you will earn
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58000 and it is unlimited.
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Now what you are expecting in the market,
First of all, understand here that you do
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not want the market to close in between 17100
to 17490, You don't want it at all.
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You want the market to show a tremendous movement
and see it is not necessary to wait till the closing.
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I am giving you this example.
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It is possible that at your time, the nifty
price is different and you may trade in Bank
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Nifty, or maybe you trade in stock options
so you can use this strategy everywhere.
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It is not necessary that we have to come out
on the expiry, you can exit earlier then you
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can use this strategy for intraday also, and
it is better for intraday because buy on the
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same day and sell on the same day.
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Why do you have to do it on the same day,
because you are theta short here, when you
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buy the options then theta decay is going
on continuously and if you will keep holding
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your position, then maybe you will not get
maximum profit.
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We are talking about expiry then it is not
necessary that we have to go till expiry,
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but if you are feeling that I had invested
10000 and the market has moved, I will have
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a loss of ₹2300 on the expiry but you feel
that you are making a profit of
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Rs.1680 on one lot, then you can book it and
get out too.
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And if the market has fallen a little bit,
then you are earning ₹1800 also, you will
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have a loss of ₹3300 on the expiry, but
even if the market falls a little bit, then
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you can make a profit.
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So it is not necessary that we have to wait
till the expiry, we can use it on intraday
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also, so the best thing about this strategy
is that you can use it intraday, the strategies
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we have learned earlier we have talked about
them, but we have not talked that you will
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use them for intraday.
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Especially when we were shorting, we had the
maximum profit on shorting on waiting for
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the expiry, But you can get out by buying
it intraday on the same day and selling on same day
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But It is also very important to have a view
of the market.
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Your view is not like that the market will
be bullish or Sideways, your view should be
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like that you can see too much volatility
in the market, you need this view here that
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movement can come in the market and if the
movement can come then I have to catch it.
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So it may be that the time of election is
coming in the market and it may happen that
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a very big event is coming or some budget
is coming then there can be turmoil in the
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market and you make profit from it, you can
use this strategy and I hope you like this
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strategy and how you feel you can tell me
in the comments, whatever you liked in this
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video you will let me know by commenting below.
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If you have a question then ask in the comments
and we will try to cover them in the next
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video and like this video to give your love
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I will see you in the next video till the
time you go self-made.
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