- 1 How Understanding Money Required for Options Trading Can Help you Manage your Trading Account More Effectively
- 1.1 Being ignorant is not so much a shame, as being unwilling to learn. -Benjamin Franklin
- 1.2 By failing to prepare, you are preparing to fail. Benjamin Franklin
- 1.3 Option Trading Amount with Rs. 1 Lakh
- 1.4 Option Trading Amount with Rs. 5 Lakh
- 1.5 Option Trading Amount with Rs. 10 Lakh
- 1.6 Options Portfolio Trading Strategies
- 1.7 Conclusion: Why Money Required for Options Trading Ain’t as Good as it Used to Be
How Understanding Money Required for Options Trading Can Help you Manage your Trading Account More Effectively
Beginners option trader stop with this question.
Understanding the right amount required for options trading. And what to expect with the invested amount in options trading.
Being ignorant is not so much a shame, as being unwilling to learn.
Amount required for Selling an Option Call or Put
The amount is roughly around Rs. 60,000.00.
Now Let’s see the Margin Required for a Spread
This brings us to roughly around Rs.40,000.00.
By failing to prepare, you are preparing to fail.
Option Trading Amount with Rs. 1 Lakh
- Limited Strategy
- Simple Strategy
- Only Two Spreads
- Single Short Selling
- No Adjustments
- No Greek Management
- Very Less Cushion for Loss
Option Trading Amount with Rs. 5 Lakh
- Beginners Strategy
- Adjustment Possible
- Many Spreads
- Multiple Short Selling
- Medium Cushion for Loss
- No Greek Management
Option Trading Amount with Rs. 10 Lakh
- Advanced Options Trading Strategy
- Options Adjustment Possible
- Option Strategy Staggered Entry Possible
- Multiple Spreads
- High Short Selling
- High Cushion for Loss
- Options Greek Management
- Adjustment with Greek Management Possible
To begin with at least Rs. 5 Lakh is advisable.
Options Trading with a very Limited Amount of Rs. 1 Lakh limits you to get the true benefit from options trading.
With Rs. 5 lakh one can easily implement basic two and three legs strategies.
Can implement basic Options Adjustment Strategies. Experience Greeks for basic understanding.
Options Portfolio Trading Strategies
This is for professional Options trader who motive is not only trading many options strategy but also hedging their Investments. They deal in Index Options as well as Stock options which are more volatile. Besides, they trade in monthly option strategies along with weekly option trading strategies.
- Hedging Investments
- Trading Stock and Index Options
- Managing Options Greek
- Managing Advance Option Greek such as Vanna & Vomma
- Live and Real Time Options Greek Management
- Trading in Weekly Options
- Advanced Option Strategies
- Portfolio Options Trading Strategies
- Trading based on Volatility
- Trading Stock Futures & Stock Options Multi Leg Strategies.
The amount required for being a professional options trader is above Rs. 50 Lakhs.
You can start with Option Adjustment Checklist.
Conclusion: Why Money Required for Options Trading Ain’t as Good as it Used to Be
The stock broker is the Right Person who would explain you that.
If someone is aiming to become a professional options trader he has to begin with at-least Rs. 5 Lakhs.
But in the meantime, here’s a tip you can use right away. Start Paper Trading.
Go learn the Various Options Trading Strategies.
The reason what motivated me to write this article is that many people do not know where to start and how big options trading can be.
Let us know what’s the biggest thing you’re struggling with right now that I can help you with?
Let us know in Comments.