Updated: Apr 10, 2021
Welcome to the mastery article of Futures and Options. Let’s learn about what are futures and options and learn about options trading strategies for beginners. Before you move further into this article, let me give you some details about this article.
Starting with the details, the very first important detail is; who will be the person who can get the benefit from this article. So there are two important sets of people. The first set of people are those who are well settled in their carrier. They may be IT professionals, doctors, engineer anyone who are well settled in their life. But they want to improve their investments in a bigger way and want to get more return what they are currently getting.
So in the coming forth articles, we will discuss a couple of strategies which are like fire and forgot strategies. I would prefer to call them fire and forgot options strategies because once you implement them, you know how much are your profit and how much you will lose. You do not have to look at your screen all the time
The biggest problem with the professional or who are working is that they cannot sit in front of the screen all the time and that’s why most of the option trading strategies which are available in the stock market are not that much helpful for them. With coming forth options strategies which we will discuss are very reliable.
This whole article which will come in the future will be beneficial for those types of people who want to be a little bit more active than passive investors but they do not want to become a full-time trader. I have one quote, that you should never build a long-term asset from a short-term asset. At the same time, you should never finance a certain asset from an uncertain income. So we will discuss such types of options strategies that will give you easily 25-30% return in a year.
Now let’s focus on what you are going to get in the coming articles. There will be three levels in the option trading strategies: -
So at the Basic level, we will discuss the basics of future and options trading strategies and also some basic terms associated with future and options. In Advance level, we will discuss options Greeks, options writing, how to do adjustments and cover your losses, and many more. At the Expert level, we will learn the expert level of strategies especially if someone is more serious and want to take their journey to the next level. What should be the psychology you should have? How much money you should have? How much should be the risk management and many more.
Now another important part how will be the article structured? The article will be designed in a very systematic way of learning. You will learn in a very detailed way about each and every topic. There will be detailed explanation of all the terms and strategies regarding the future and options trading. You will see how these future and options strategies with almost zero risk will be benefit for you. Your trading style will be changed after knowing these future and options strategies.
So we will learn in the very first article about why you should understand about the options and why you need to know the future and options? Whole articles will be talked about that.
But the first thing you need to understand why a retail investor who is looking to build long-term wealth should know about the future and options? It’s because if you do not know about the future and options, then you will never be a successful investor. For being a barrier, you should know how to attack, and as well as you should know how to defend yourself. So defending is more important in the stock market than attacking. If you defend then you will successfully attack and you can win. The market is a game of mind. So to defend yourself, you should know all the tactics.
There is a lot of miss understanding and misinformation spread especially among the newbies or new investors. What our textbook theories said about F & O? They inscribe like F & O are very risky. You should never trade. Yeah, futures and options are indeed risky but F & O are not for trading, these are for hedging. We will discuss more about the hedging in the later articles. Hedging is like buying an insurance policy that will save you from a big loss and can make a profit.
So before move further into the articles, let me discuss briefly about what are futures and options?
A futures contract is a right and a contract to buy or sell underlying stocks at a fixed price and deliverable at a fixed time. While options contract is a right without a contract to buy or sell equity or indexes. The call option means the right to buy and the sell option means the right to sell.
Futures and Options are the significant sorts of stock subordinates trading in a stock market. These are contracts inscribe by two gatherings for exchanging a stock asset at a fixed determined cost at a later date. Such agreements attempt to support market chances engaged with stock market exchanging by securing in the cost.
Future and options in the stock market get their cost from an underlying asset, like shares, securities exchange indices, commodities, ETFs, and the sky is the limit from there. Futures and options fundamentals provide people to lower future danger with their investments through pre-decided costs.
We will discuss more about this in the coming session. All the articles will come with comprehensive details only for you to make your journey smooth in the stock market. Welcome to the world of stock market.
Disclaimer – All those strategies which we will discuss in the future are neither a tip nor a recommendation. Please make your mind and make your strategies. You can use these strategies also but after properly understanding risk and reward.