With practical insights and actionable strategies, this book covers a range of market scenarios, from extremely bullish to bearish, sideways positive to negative, and range-bound markets. Discover how to craft effective option strategies tailored to different market conditions, including NIFTY and BANK NIFTY weekly strategies and breakout strategies on indices. Higher the number of contracts outstanding, the more the interest for that particular strike price. We need to understand that each and every contract in this option chain has its option chain analysis books own mechanism and can be traded like an individual by-product.
- The rows represent different strike prices, while the columns show various data points for each contract.
- For example, a synthetic long stock position can be created by buying a call option and selling a put option at the same strike price and expiration.
- This lets traders quickly compare options with different characteristics to make informed decisions.
- For example, if you buy a call option with a current strike price of $35 and the market price is $37.50, the option already has an intrinsic value of $2.50.
- Discover how to craft effective option strategies tailored to different market conditions, including NIFTY and BANK NIFTY weekly strategies and breakout strategies on indices.
#7 – Rogue Options
Usually, many options trading books explain some options strategies at the surface level. However, this book provides an in-depth explanation of each strategy’s options strategies and different perspectives. To put it in simple words, implied volatility tells you, what is the expected volatility in the price of a security over the next one month.
Calls and Puts
Buying an option like this can be a big risk, especially if you are a new options trader. Use the Greeks to assess how different market scenarios might affect your position. For example, options with high gamma can have rapid changes in delta as the underlying price moves, which could be promising or risky depending on your strategy. To cater to the experienced traders, the emphasis is laid on Implied volatility with a detailed section on the Option Greeks, which will help understand how option pricing gets impacted by market conditions.
#9 – The Bible of Options Strategies
This book starts with the basic concepts of options but slowly brings up all the topics of option chains. Whether you’re looking to buy or sell options, this book provides invaluable guidance on maximizing profitability and minimizing risk. Written by an experienced trader, this book offers unique perspectives on option trading, making it a must-read for anyone interested in mastering the art of options trading. This is created by combining options or the underlying asset to mimic the risk-reward profile of another position.
Widely recognized as an authority on derivatives, futures and risk management, Hull has served as a consultant to many of the best-known investment banking firms. Consequently, his book contains actionable information on swaps and other derivative instruments, trading interest rate futures and strategies for estimating the time value of options. The Intraday Momentum Index is a good technical indicator for high-frequency option traders looking to bet on intraday moves. It combines the concepts of intraday candlesticks and RSI, thereby providing a suitable range (similar to RSI) for intraday trading by indicating overbought and oversold levels.
In-the-money options have strike prices that have already crossed over the current market price and have underlying value. Not all public stocks have options, but for those that do, the information is presented in real-time and in a consistent order. Learning the language of an option chain can help investors become more informed, which can make all the difference between making or losing money in the options markets.
While many platforms use green for calls and red for puts, always double-check the legend to avoid confusion. It will skilfully highlight how trading strategies can be used to gain profits from aspects such as Volatility, Time Decay, or changes in interest rate. It also uses New Charts and examples with discussions on how the proper application of these Greeks can lead to the accuracy of pricing and trading while offering alerts to a range of other opportunities. This book is packed with many real-world examples to demonstrate how to create your own small hedge fund by applying the basic framework model of insurance companies. It is a feast for any trader who has the basic knowledge of options and wants to earn constant income. However, it may not be suitable if a person is new to the stock market (in fact, options trading itself is not suitable for novice people).