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Put Ratio Back Spread #OptionTrading Strategy to Make Money in Bearish #StockMarket - YouTube
Channel: Pushkar Raj Thakur: Business Coach
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So as Promised you are going to get another
options strategy through this video and you
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will use this strategy when you have a view
for the market that market will fall from
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here, so this strategy is Put Ratio Back Spread
Strategy, now you must have guessed the name is technical.
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But when you understand this strategy, then
you will feel that we can earn a lot of money from this strategy.
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So why are we using these strategies, so that
we know in advance how much profit we will
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get and we can minimize our losses?
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So the minimum loss and maximize profit is
our motive, so here your view is market will fall from
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here, so you will Make Money.
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And if the market rises, then what will happen?
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So if the market goes up, then you will still
make a profit by using this strategy.
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You can get a loss only in two scenarios,
the first scenario is that the market fell
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but did not fall too much.
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If it is slightly bearish, then you will be
at a loss.
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Meaning the market fall, Let's say the market
is currently at 17200.
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Even if it reaches 17,000, then you won't
make much profit.
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But if it reaches 16500, or if it reaches
16000, then you are going to earn a lot of
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money, so what is your view, it does matter.
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Right now we have given you some slightly
bearish strategies.
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Now we are talking about how your view is
highly bearish here, that the market will
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fall too much and even if you are wrong.
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If the market goes from 17200 to 17400, even
then you will make a profit.
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Even if it comes to 17800, even then you will
make a profit.
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Even if 19000 come, even then you will earn
profit.
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So no matter how much it increases, profit
is coming and no matter how much it falls,
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you are still making a profit.
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Loss is happening when it falls a little bit,
meaning if 100-200 points fall then you can
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lose but it will be limited.
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The Ratio which we are talking about, I will
tell you what the ratio is, but if you see
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the reward to risk ratio of this strategy,
then it is very good.
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So you can make a lot of profit here but the
loss will be limited.
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I will show you on the computer screen how
we make this strategy and in which way you
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can use this strategy and what is to be done
in it.
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First of all, we have a put option, and in
the put option, we are going to do buying
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and selling.
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And ratio means that we are going to do work
in a ratio of 1:2, so what we have to do to
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make this strategy.
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We came on sensible.
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You can also come on it, there is a link in
the description and comment box, you can also
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log in to it.
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Then you will go on strategy builder and when
you will come on it, then you will go to the
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readymade section in it then you will click
if you have a bearish view.
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Here we are talking about the put ratio back
spread strategy.
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See here what you did, here Nifty is going
up almost to 17,200.
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So here we sold the at the money option which
is our put option, which is our put back spread strategy.
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If we sell it, then we will receive our premium,
as time will pass we will get benefits
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in the strategy and the second thing because
we are working in a ratio, so if we sold one
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lot then we will buy two lots but out of the
money.
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Out of the money will be in the put option,
in the 17200, so it can also be 17,000 and
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it can also be 16950, so you can change it
according to your own.
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Now here you are buying two lots at the rate
of ₹36, so you are paying this premium.
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Now see the maximum profit here.
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Here 8.41 lakhs is written, so suppose there
is unlimited profit
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Because here your cost is, only 24500 funds
are needed and your maximum loss is already
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defined that the maximum loss you will get
here will be around 9000.
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Here 8,918 rupees is written, so our maximum
loss will be this.
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The reward Risk ratio is ₹94, meaning if
our view is correct then we can earn a lot of money.
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Now like I said we are seeing the market is
almost at 17220, if the market falls a little
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bit from here, if it comes to 17120, then
we will suffer a little bit.
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The maximum loss that we are seeing here is
seen around the price of 17000, and we will
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have that loss.
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If the market falls to 200 points, we will
not gain so much.
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But if the market falls a little too much,
suppose it falls to 300-400 points then you
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can earn money.
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If it falls more than it, then your profit
is unlimited.
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But if you turned out to be wrong, if your
view was wrong, you thought the market would
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fall but the market went up.
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The market has reached 17750.
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The market moved up a lot and it came to 18000.
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Even if the market rises, you will still have
a limited profit here.
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Here you are seeing thousand rupees that you
will continue to make limited profits here,
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then you are going to make money, you will
lose less money and earn more, if your view
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is correct then what you understood in this
strategy, that if you feel that the market
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will fall, then you can make unlimited profit
and secondly if the market falls a little
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there will be a loss but the loss is defined,
It's not like this that your all money will
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go away and if the market goes up then you
will make profit here.
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Apart from this, what are the effects of different
Greek options?
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Now you can see below that Delta, theta and
A Gamma is written.
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Apart from this, you get a lot here.
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If you go to Sensible, then you will also
see Vega, then you are also seeing all the
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options Greeks.
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So what will be the effect of it here?
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You can't and you can build this strategy.
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Here you understood that when building a strategy,
we are working in the ratio.
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We are selling them at the money options,
and we are buying two lots and we are working
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in the ratio of 1:2, so its name is Put Ratio
Back Spread Strategy.
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So the strategy you learned from the basics.
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All these strategies are now clear to you.
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Now I have some questions and it is necessary
to ask these questions.
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I say that I have a view in the market that
the market will fall but it will be slightly
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bearish, which strategy would you use,
Would you use the Put Ratio Back Spread Strategy
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that you just heard?
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Will you use this strategy if my view is that
the market will fall but it will fall slightly
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Answer: You will not use it in this.
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You can make Bear Put Spread in fact option
selling also, so you can use strategy, but
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which strategy to use when, this is more important.
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Alright, and it's all a game of practice.
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These are all things as you invest time in
the market, you will keep learning and I hope
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you are learning a lot, how you like this
video.
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You can tell by liking and giving your love
and if you have any questions then ask in
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a comment, again what did you like best in
this video, you will comment.
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If you are watching this video on Facebook
then follow and if you are watching this video
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on YouTube then subscribe.
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If you are new in the share market and If
you do not have a demat account till now,
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then there is a link in the description and
comment box of leading brokers.
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you can open your demat with any broker
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Finally, I will see you in the next video,
till now you learned the bullish option strategy
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and you learned the bearish Option strategy,
now if the market will remain sideways or neutral
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Then which strategy fact some more options
strategies?
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you will get to learn in the next few videos.
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So stay tuned and stay connected.
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I will See you in the next video till the
time you go self-made.
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