Options trading has become very popular recently, especially among young people, due to the promise of quick and easy profits. However, this is often misleading. In reality, most new traders, particularly young ones, end up losing money. Studies show that: Majority (85%) of young traders incur losses within their first year of options trading. Source:
Open interest is the total number of outstanding contracts in a futures or options market. It tells us how many contracts are currently “open” or active, meaning they haven’t been closed or settled yet. How does it work? So, let us understand open interest in options trading practically with an example. Day 1: Trader X
Futures trading isn’t for everyone. It’s mainly appropriate for three types of people or situations: Skilled investors who really know their stuff about markets and risks. These are people who’ve been in the game for a while and understand all the ins and outs. Risk-takers who can handle the possibility of big losses. Futures can
A company does well financially and meets its goals, its stock will usually rise in value. But if a company makes less money than expected or has problems, its stock will likely fall. Stock prices reflect how well businesses are doing now but also how analysts think they will do in the future. Broader economic
Rs 1000 is a small amount to start active option trading, it is possible to learn by buying 1-2 option contracts as a start. The tradeoffs are limited profits due to low capital and higher risk of losses wiping out the amount. It is better to paper trade first before risking real money. Key Points:
When you buy in options trade over stocks, here it makes a difference with stock. In option trading you can earn profit when the stocks move up or down. While in stock trading, you only profit when stocks move up. When you buy an option contract, you only pay a small premium upfront. Your maximum
Algorithmic trading is the use of computer programs to automatically buy or sell stocks, bonds, or other financial instruments based on pre-set rules and strategies. Before we move on to their risks, let us list out some advantages, such as Speed Accuracy Consistency Reduced costs Brief overview of Algorithmic Trading Risks: However, algorithmic trading also
For a call option, you profit if the market price of the stock goes up above the strike price before the option expiration date. Whereas, for a put Option, you profit if the market price of the stock goes down below the strike price before the option expiration date. So, in simple terms: Call Option
People are very interested in options trading because of the potential to make more money with relatively small capital in a shorter time frame. However, there are risks involved. Traders often get greedy, aiming to double or triple their money quickly by investing a significant part of their savings. So, what makes the traders fail
Do you know how Oigenie revolutionized trading? Before we dive in, let us see some facts: …. Approximately 3% of India’s population is currently invested in the stock markets. Livemint More than 80 million unique investors invest money in the Indian stock markets through NSE. Source: Livemint There are 4 million active derivatives traders in
