Part 6 Learn Institutional Trading

Popular Option Strategies

Options can be combined to design strategies:

Beginner Strategies:

Covered Call: Hold stock + sell call option.

Protective Put: Hold stock + buy put to protect downside.

Intermediate:

Straddle: Buy call + buy put (same strike) → profit in big moves.

Strangle: Buy OTM call + OTM put → cheaper than straddle.

Spread: Buy one option, sell another to reduce cost (Bull Call Spread, Bear Put Spread).

Advanced:

Iron Condor: Sell OTM call + put, buy further OTM call + put → profit in sideways market.

Butterfly: Buy 1 ITM, sell 2 ATM, buy 1 OTM → limited risk, limited reward.

Calendar Spread: Sell near-term option, buy long-term option.

Options Trading in India

Options are traded mainly on NSE.

Index Options (Nifty, Bank Nifty, FinNifty, Sensex) dominate volume.

Weekly expiry (Thursday) has made option trading highly popular.

SEBI Rules: Margin requirements apply for writers, buyers only pay premium.

Retail boom: 90%+ of daily market volume comes from options now.