This was very good learning. Thank you for sharing. I do have an important question, request you to please answer.
In this video, the Bank Nifty was falling and VRD sir sold PUT options. Why he SOLD PUT options instead of BUY? Normally, when the market is coming down, PUT options being bought or CALL options being sold. Please help me understand.
Also, please help whether my understanding is correct?
UP trend (Long position) – Buy CALL option or Sell PUT option at the lower price and sell/buy at the higher price.
Down-trend (Short position) – Buy PUT option or Sell CALL option at the higher price and sell/buy at the lower price.
The rules that you mentioned are applicable if you have a directional bias in the trade.
However, the strategy that was applied was not directional in nature. It was based on whether a certain level would be broken or not. You would need to dwell deeper in options to understand how some very smart and elegant strategies can be built using options that do not depend on necessarily where the market is heading.
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Hello,
This was very good learning. Thank you for sharing. I do have an important question, request you to please answer.
In this video, the Bank Nifty was falling and VRD sir sold PUT options. Why he SOLD PUT options instead of BUY? Normally, when the market is coming down, PUT options being bought or CALL options being sold. Please help me understand.
Also, please help whether my understanding is correct?
UP trend (Long position) – Buy CALL option or Sell PUT option at the lower price and sell/buy at the higher price.
Down-trend (Short position) – Buy PUT option or Sell CALL option at the higher price and sell/buy at the lower price.
Thank you
Hi Amit,
Thanks for reaching out.
The rules that you mentioned are applicable if you have a directional bias in the trade.
However, the strategy that was applied was not directional in nature. It was based on whether a certain level would be broken or not. You would need to dwell deeper in options to understand how some very smart and elegant strategies can be built using options that do not depend on necessarily where the market is heading.
That’s why they are high probability strategies.
Keep learning!
Best regards,
Team VRD Nation
Very grounded and pratical video thanks vrd sir
Nice strategy 👍