Creating your own option strategies

Create and Analyze your own Option strategies - How to Use

In this blog I am going to explain how we can use this application to create your own option strategies.  Depending on market condition you can take a call which option to go for.

1. Go to optionstrategy.co.in and click on "My Strategy" button.
2. Under Index/ Stock, select one of the instruments that you want to play with.
3. Then select the script. The example that is demonstrated here is with NIFTY. The strike prices associated with it will be populated under Strike price combobox. 
4. Select the valuation date by clicking on the calendar icon button. This date should be less than or equal to the minimum expiry date that you are planning to use.

5.Now select one of the Option types. If you have selected Index, then you can select one of Call, Put or Futures. If you have selected stock, you have the option of selecting stock also.
6. Once instrument type (Call/ Put/ Futures/ Stocks) is selected, select one of the strike price. To get more reliable results, prefer liquid strike prices. Generally 3-4 strike price above and below spot price is liquid. For stocks, the criteria narrows further.

 

7. Select buy or sell.

8. You can change the expiry date if required

9.  Enter the price that you think you can buy or sell the instrument. Currently the prices are based on End of Day prices. You can also enter the price that you have entered in the strategy earlier.

10.  Select number of lots you want to trade with.

11.  You can select other call or put option, futures or stocks with different parameters in other lines.

 

12. Now click on My strategy button.

13. You can see a chart appearing below showing how the pay off graph will look like.

 

14. You can get an idea around which range your profit or loss will begin. 

You can create your other such strategies depending how you perceive the market. 

You can change valuation date and see how your pay off strategy will look like within short time frame.

Note- The values displayed are for approximation purpose only. they don't show accurate results because of market forces. With change in option moneyness, implied volatility will change and it will affect the option prices.. 

 Mail us your queries/ suggestions at info@optionstratgey.co.in

 We would be happy to help you.

Happy Trading!!!!

Options trading in Indian Market

Option trading is risky and has the potential to give good profits also with low investments. We were thinking of designing a tool where we can visualize our strategy based on few days and not keeping our strategy till expiry.

With a strategy we need entry and exit points or triggering other trades to hedge. We needed to visualize this graph and created an application in excel. This was fantastic stuff to learn various strategies and how they vary with time. Even those who are new to options trading and have basic knowledge of options can start playing with it.
We also got an idea where we should enter some other position.

We thought of sharing this stuff with other people and hence we brought it on web on optionstrategy.co.in. You can visit the My Strategy Link and create different strategies. No need to go for manual calculations. Just combine various options, futures and stocks and create your own strategies.

direct URL- http://optionstrategy.co.in/optionstrategy.html

You can also go through how to use this application at http://optionstrategy.co.in/howtouse1.html

Right now we have designed it based on EOD prices. You can also enter your prices manually at which you can buy or sell. You can enter your number of lots manually that you want to buy or sell.

It has been designed on Black Scholes approach and hence may not be accurate as volatility varies with time. Investors are required to trade cautiously. They should expect losses early than what is shown in graph.

I will be putting up other tips and strategies further.

Happy trading and learning.