Sharekhan is one of the leading stockbrokers in India, providing a range of investment options to its clients. Options trading is one such investment option that allows traders to speculate on the future price of a stock. In this article, we will discuss how to do options trading in Sharekhan.
What are Options?
Options are contracts that give the buyer the right, but not the obligation, to buy or sell a security at a specific price on or before a certain date. There are two types of options – call options and put options. A call option gives the buyer the right to buy a security at a specific price, while a put option gives the buyer the right to sell a security at a specific price.
Opening an Account
To do options trading in Sharekhan, you need to open a trading account with them. You can do this online by visiting their website and filling out the necessary details. Once your account is created, you need to fund it with a minimum amount to start trading.
Placing an Options Trade
Once you have funded your account, you can start placing options trades. To do this, log in to your Sharekhan account and go to the options trading section. Here, you can select the stock you want to trade options on and choose the expiry date and strike price.
Selecting the Strike Price
The strike price is the price at which the option can be exercised. When selecting the strike price, you need to consider the current market price of the stock, the volatility of the stock and the expiry date of the option.
Understanding the Premium
The premium is the price that you pay to buy an option. It is determined by factors such as the current market price, the strike price, the volatility of the stock and the expiry date of the option.
Options trading involves risks, and it is important to understand them before you start trading. The risks include the possibility of losing your entire investment, the possibility of the stock not moving in the direction you expected and the possibility of the option expiring worthless.
Managing Your Trades
To manage your trades in Sharekhan, you can use their trading platform, which provides real-time market data and analysis. You can also set stop-loss orders to limit your losses and take-profit orders to lock in your profits.
Tips for Options Trading
Some tips for successful options trading include doing thorough research before placing a trade, keeping an eye on market trends, setting realistic goals and being disciplined with your trades.
Options trading can be a profitable investment option if done correctly. In this article, we discussed how to do options trading in Sharekhan, including opening an account, placing a trade, selecting the strike price, understanding the premium, managing your trades and tips for successful trading. Remember, options trading involves risks, and it is important to do your research and manage your trades carefully.