Options Thread
How options allows to change and adjust view dynamically.
Let’s understand with a live example.
Example : Nifty is at 11921 and you are bullish on Nifty.
1) Buy Naked 11900 CE(call) at 167
Breakeven : 12068
Max Loss : Rs 12555
Max Profit : Unlimited
2) Now your view changes from bullish to slightly bullish so you can convert naked call into a bull call spread by selling 12100 CE at 72
Breakeven : 11996
Max Loss : Rs 7100
Max Profit : Rs 7800
#OptionsTrading #trading
3) Now your changes from slightly bullish to slightly bearish. You can convert the bull call spread into a ratio spread by selling more 2 calls of 12100 CE
Breakeven : 12224
Max Loss : Unlimited above 12224
Max Profit : Rs 18550
#OptionsTrading
4) Now if your view changes to sideways then you can buy 2 lots of 12200 CE to convert the ratio spread in a butterfly spread.
Breakeven : 11936 to 12182
Max Loss : Rs 2600
Max Profit : Rs 12300
#OptionsTrading