Option buying - A basic thread ๐งต๐งต
Some Important points for Beginners
Kindly Re-Tweet for Max Reach ๐
1) OTM Options Sucks your money everyday -
In case of -
No move
Small move in favor
Small move against
Big move against
You will loose everyday if holding OTM Option
2) Buy Horizontal chart and Enjoy Vertical move
Look at the Ambuja Chart posted -
- You need some basic charting knowledge for this
- Buy when it is about to break resistance
- Less volatility low premium
- Buy Horizontal Enjoy vertical
3) Hedge Hedge Hedge
- Always hedge even if with distant option
- Market opening at gaps and once spot price moved against you it is difficult to make money in stock options
- So hedge by selling any of next strikes and keep risk small
Don't hold weekly options overnight ๐๐
4) Don't get influenced with MTM Screenshots
- Everyone loose
- They post MTM only when in profit
- Overnight weekly position can blow your account in days
- Research stocks based on technical analysis and buy options when stock is about to breakout