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Bear Put Spread Option Trading Strategy | Stock Market Training Course | Pushkar Raj Thakur - YouTube
Channel: Pushkar Raj Thakur: Business Coach
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So welcome back to another video of options
strategies today you are going to learn another
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bearish options strategy, which is the Bear
Put Spread, by now you are beginning to understand
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You can break it down by yourself.
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Bear means we want that market to fall from
here.
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Put means we are going to trade put options
and spread means we will buy and we will sell,
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wow you are understanding very quickly, very
nice.
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So if you understand this, let's stop this
video here and you can go home.
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Anyways, it's my job to explain everything
to you.
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So, there are still many strategies left,
so now understand this strategy.
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So, why are we making spreads now?
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We are creating spreads because we are defining
how much our maximum profit and maximum loss
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will be.
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We will define this already, so if we buy
a put option, most people buy it.
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So when we buy a put option, we buy a put
option when we feel that the market will fall,
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so our view for the market was that it is
slightly bearish that the market will fall.
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If the market falls, then I can buy put options
simply, but if the market rises then, So the
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put option I bought here can be zero.
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So, all my money can be lost here, so I am
not buying only put options here, I will work
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with strategy here.
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The second thing is if the market increases,
then I have a limited loss and if the market
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falls then I want to profit, then what you
are expecting here, that expectation is that
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the market will be slightly bearish here,
it is our view and now let's see this strategy
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that how it works, the strategy in which you
are going to buy put options on at the money.
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So you will buy the put on ATM option and
you will sell the out of the money options,
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you will sell the OTM options.
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Now it means that suppose the nifty rate is
going at 17000 and suppose nifty is at 17200,
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so if nifty is at 17,200.
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Then what is at the money, you will say that
17,200 is at the money.
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But now tell me fast, this is about the put
option, what will be the out of money on the
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put option, will it be 17,300, wrong it will
be on call of option, out of the money.
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Here if we are talking about the put option,
then it will be on 17,200, so it means if
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I write 17200, when will it be out of the
money options.
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You will say that sir it will be out of the
money if we are talking about put Option.
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Very good, if you have come to know this much,
then your strategy is made.
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Now let's see how the strategy works on the
computer screen.
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Here again, we come to Sensibull, then on
Sensibull you can go to strategy builder,
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here come on bearish strategy on ready-made
strategy.
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And here we click on Bear Put Strategy, as
I clicked on Bear Put Spread.
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Let's see how Nifty is doing.
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Nifty is going on around 17200 and here at
the money we just talked about the 17200 put
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option.
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We bought this because if the nifty falls,
then we will get profit so here it is going
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around ₹94, so we are buying then we are
paying the premium and what we are selling,
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we sell the put option.
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So we will make a profit when the market moves
up from here, so we are buying it just to
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hedge our position.17000 at the price of 41,
out of the money option of 17000 according
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to put option, so here you purchased for 17200
at the money option, and here you sold for
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17000.
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Now let's see our maximum profit is defined
already as ₹7000, if nifty falls from here,
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suppose it comes to 16000 or it goes to 15000
or how much it falls.
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Our breakeven point is visible here that we
will start making losses from 17147, but according
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to our view, if nifty on the expiry remains
the same or it falls a little, then we will
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make a profit, then here you can see if Nifty
has reached and your view for Nifty that it
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will come to 16800 or 16900.
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So you can change the expiry date, whatever
your target date, so if you will check on expiry.
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So here You can see, 16950, your profit of
₹7000 is defined already, and your loss
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if nifty increases if your view turn out wrong
and Nifty increases
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Then if the Nifty increases here then the
maximum loss is only ₹ 2600, so here if
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you see the risk to reward ratio, in the last
video I told you that the risk to reward ratio
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was not so good for that strategy.
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But here it is 2.8, so You can see the Reward
of 2.8 that is the reward to risk ratio or
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we can call it the risk to reward ratio.
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So the reward to risk ratio is 2.8 here, which
is good enough.
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So our loss will be around ₹2600, and our
profit will be around 7300 and breakeven is clear.
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The Probability of profit here is 40% so what
is the probability of profit here.
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What is your view of the market?
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Right now I am seeing that the Nifty is rising
in the market.
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If I follow the price action, then I can see
the nifty rising.
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If I can see it and you are feeling that the
market will fall and you work according to
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strategy then if you have not cashed according
to price action, then you can make your loss.
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But loss is defined as that even if you go
wrong, you will still have a loss of a maximum of 2600
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The second thing here is that your maximum
profit is around 7300.
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But if you want that according to you, you
think that Nifty will fall too much.
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Then How can you get maximum profit from here?
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If I say how there can be unlimited profit
there, then there are different strategies
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for your different views.
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Here we were saying that we are slightly bearish
that the market will fall slightly and if
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the market is falling too much then, then
you have to use another strategy, which we
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will learn in the next video.
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So now, you have learned Bear Put Spread in
the Bearish Option strategies and Earlier
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we learned about Bear Call Spread.
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Now in the next video, we are going to talk
about Put Ratio Back Spread in which I said
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that you can get unlimited profit If Nifty
falls.
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Now we are talking about Nifty, the same you
can trade in any stock option.
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If you want, you can trade the same strategy
in the Bank Nifty, so these are the strategies,
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these Strategies will work everywhere where
you are trading in options.
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So how do you like this video?
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You will tell in the comments and if you have
any questions, then ask in the comment, I
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hope you must have got the concept clear that
what we can do in Bear Put Spread.
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When we're talking about that we will buy
the At the money and we will sell here Out
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of the money options for put.
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So I hope the concept is clear and if one
thing is not clear then here see that
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We worked call options in bear call spreads,
and our loss was high.
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So we see that the risk to reward ratio is
better in bear put strategies.
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So our view was slightly bearish at both the
places, so which strategy you should use.
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Now you have learned both the strategies,
so here your knowledge will increase.
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If you know only Bear Call Spread Strategy,
then you use only this strategy.
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Now only in one view, if you feel that the
Market will fall a little, you have two strategies.
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You have to see the risk to reward ratio,
but the reward to risk ratio is better here.
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So if it is better here, then profit can be
more and loss can be less, so we will use
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this strategy.
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It is not necessary to use that strategy,
so as you will learn upcoming strategies then
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you have to choose which strategy to use.
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Today, if your view is clear, which strategy
to use.
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Show make notes for this let these notes will
be helpful for you for a lifetime.
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How was the video you can like to give your
love and share it?
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Many people are making losses.
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To minimize loss and maximize profit, we want
it and if you want to do the same then share
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this video with all your circle.
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Finally, we have made a complete playlist
on the options strategies.
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From starting till now, the upcoming strategies
will also be found in the same playlist, then
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step by step you can see all the videos, then
there is a link on the I button.
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There will be a link on the end screen, then
you can see all the strategies.
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If you do not have a demat account yet, then
you can open your account by going into the
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description and in the comment box.
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If you want to log in to the Sensibull too,
then you can also create your account.
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There is a link in the description and comment
box so you can build your strategy in this
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way on the Sensibull.
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I hope you liked this video, share this video
and go
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self-made.
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