BC TRADING
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Thread: Free Options Trading Course for Beginners with small capital.

Reference: Option trading marathon series, part 1 from Mr. Subasish Pani ft. @PushkarRThakur

Collaborated with @AdityaTodmal

 1/ Trading journey of Mr. Pani

• He has an experience of 7 years.

• He has made a profit of Rs. 20 cr. over these years with a capital of Rs. 2 cr.

• However, it's not easy to make such profits.

• More difficult, is to retain those profits and build more on it.
2/ How he ventured to options selling

• He started with futures and option buying however after a certain point when his capital grew, he faced scalability issues and hence he resorted to options selling.
3/ Investing becomes imp once the capital grows:

• Since his trading profits have grown well, he has started investing (investing is always for LT).

• For folks who dnt have much info regarding investing can simply buy Nifty 50 stocks & keep rebalancing as Nifty 50 does.
4/ Covered calls strategy for the portfolio:

• Pledge the portfolio and receive margin ~80% which he would then use to sell OTM CEs of the stocks which are in his portfolio.

• This helps in generating fixed income from the portfolio.
5/ For folks who wish to learn trading, check this:

• Need to have a firm commitment.

• In terms of money and in terms of how much time you would give yourself in market.
6/ Start with a small capital:

• Lets say you start with Rs. 10k.

• Buy everyday one single stock exit with Rs. 300 loss and profit of Rs. 600 with position sizing.

• Do this exercise for 30 days.

• This is to understand the process.
7/ Stick to your set up

• Be disciplined

• Don't do system hopping

• Try to take atleast 100 trades to understand the nuances of the system, as develop discipline over the period.
8/ What is Call option (CE) & Put Option (PE)

• If your view is that market will go up, an option buyer will buy a CE and if the view is that market will go downside then an option buyer will buy a PE.

• Every option has a premium.
9/ Intervals in NF & BNF:

• Nifty option strikes has an interval of 50 points and Banknifty has 100 points.

• Check Option chain for more details:
- Nifty : https://t.co/5BrThceFd3
- Banknifty: https://t.co/HbPkJw310q
10/ When does an option buyer or a seller makes money?

• Buyer makes money if the market moves in his favor.

• Option sellers make money if the market remains sideways or moves in his favour.
11/ Basic set up for option sellers: Short Straddle

• Wherever the spot is sell both CE & PE of the same strike.

• Currently NF spot is at 17530, so to short a straddle one has to sell both 17550 CE & PE together.
12/ How to initiate a trade:

• Net premium collected is Rs. ~330

•Premium decay happens the most on Tuesday Wednesday and Thursday

• Trade this in intraday and avoid overnight risk while learning.

• Probability of this set up is 70%

• The R/R should be 1:2
13/ When to exit:

• Capital required for 2 lot of strangle is aprrox. 3 lacs

• Book out based on target or SL:
- SL: if the losses amount to Rs. 5,000 or
- Target: it if the strangle is in profit of Rs. 10,000.
14/ Don't go into adjustments:

• Especially when you are in learning phase.

• Also Subasish doesn't believe in adjusting the legs, its usually SL or target for him.
15/Don't get sad when you SL is taken out

• Take that as a learning, as you will exactly know how much point SL you need to keep.

• How does the option premium behaves towards the expiry etc.
16/ Option buying requires more discipline

• Although any trader requires discipline while entering and exiting trades however option buyers requires this virtue a lot more.

• An option buyer can make money only if he can time the momentum properly.
17/ Option buying Timing:

• Usually momentum is better from 9.15- 10.30am.

• 5min TF will have more trades than 15min.

• Select the TF as per your temperament.

• If one has slightly more capital then look for trades between 1.30-3.30pm.

• 10.30-12.30pm: No trading zone.
18/ Trading psychology & discipline in option buying:

• If you have booked losses in 3-4 trades in the morning hour then just close for the day.

• If you are in profit in the morning trade , then you can risk that profit and trade in the closing hour.
19/ When to buy?

• E.g. you are using 5min TF.

• If any candle breaks the first 5min high or low buy CE or PE accordingly.

• Eg: Market gives a BO of the first 5min candle basis which you buy a CE option, but thereafter before reaching your 1:2 target it makes a downmove.
20/ When to exit?

• Now exit the CE buy and buy a PE.

• If the market is in momentum then you'll be in profit.

• If your SL gets hit, then that's an indication that market is consolidating.

• If both the sides SL gets hits then better to close trading for the day.
21/ Best time for option buyers having small capital:

• Focus only on 9.15-10.30am everyday.

• Thursdays when there is weekly expiry focus on 1.30-3.30 pm as well, as a strong move towards the end of expiry can fetch handsome returns.
22/ Take inspiration rather than getting influenced:

• Performance comparison should be with oneself rather than comparing with profits of others on the SM.
We have an upcoming two day workshop on October 15th and 16th, 2022.

Venue: Andheri East.

Go through these links and sign up for the workshop.

- FAQ here: https://t.co/l00nLRLgvN

- Registration form: https://t.co/2VdjEKPn5v
Source for this thread:

https://t.co/rVds8oqrdH
If you enjoyed this thread, here's another one which might be helpful:

https://t.co/tDscnKiAKg
Hope you discovered something new (because that's the point!)

If you did:

1. Follow us for more:

@AdityaTodmal
&
@niki_poojary

2. RT the tweet below to share this thread with your audience

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•Don't get carried away with the kind of return that Mr. Pani made in such a short period of time.

•This requires a high level of skill, and discipline in terms of which strike to choose, which time to trade, and which days to trade.

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1/ Screen Time:

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----------------------------------------------------

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(1/n)


In the past 1-2 years, there has been a sudden surge of traders who just talk about theta decay, option selling, adjustments and stuff like that..

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(2/n)

Many of these folks were told that one can 'adjust' their way out of any situation. Any sane options trader know that you cannot come out of any situation by adjustment

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(3/n)

..he realized that one cannot possibly do that and its gonna burn him one day. He's pretty smart and hence, he put a portfolio level SL & when that hits, he will stop dancing, gets out and calls it a day

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