Get Free Readymade Option Strategies Basis your View in the Market
The derivatives segment is an extremely dynamic part of the Indian financial markets. In recent years, traders have been flocking to the F&O segment in large numbers, driven by the possibility of turning quick profits.
Data from the markets shows us that the number of unique individual traders in the derivatives market in India grew by over 500% between FY19 and FY22. That said, the percentage of traders who are profitable in this market dwindled from 13% in FY19 to only around 10% in FY22.
These numbers indicate that in addition to the challenge of market volatility, options traders need to deal with a range of other problems and issues. Trading in derivatives requires skill, timing and a deep understanding of the market segment. But that’s not all. Options traders also require the right analytical tools to make quick and effective trading decisions in a market that is constantly changing.
Recognising this, Samco Securities has introduced Options BRO — an industry-first feature in the Samco trading app. An acronym for Build, Research and Optimise, this all-new options strategy builder from Samco makes it possible for F&O traders to analyse the market, choose the optimal trading strategy and execute it within seconds!
5 Problems That the Samco Securities Options Strategy Builder Solves for Traders
Despite the allure of the options trading segment, 9 out of 10 traders in this segment are unsuccessful as per recent reports from SEBI. This poor trading performance can be traced back to the following issues troubling options traders — all of which the new Samco Securities options strategy builder helps solve.
01. Data Fragmentation in Options Analysis
Essential data points for options trading like options chain analysis, open interest, options Greeks (delta, gamma, theta and vega) and implied volatility are scattered across different platforms. This means traders need to spend significant time and effort to collect data.
How the Samco Securities Options Strategy Builder Helps:
The Samco Securities options strategy builder and other features on the Samco trading app bring all the essential information to traders’ fingertips in real-time. So, traders need not worry about manually collating and assessing rapidly changing market metrics.
02. Challenges in Comprehensive Manual Data Analysis
The vast amount of data required for successful options trading — like price movements, volume, implied volatility and the Greeks — makes it nearly impossible for individuals to analyse everything effectively in real-time. This results in less informed trading decisions.
How the Samco Securities Options Strategy Builder Helps:
The options strategy builder from Samco automatically analyses over 1,000 strategies and performs over 1.5 lakh mathematical computations within just one second. This eliminates the need for traders to manually carry out such analysis.
03. Complexity of Options Trading Terminology
Options trading involves complex mathematical concepts and jargon that may be daunting for beginners and seasoned traders alike. Due to such gaps in understanding, traders may misinterpret market signals and enter into potentially risky trades.
How the Samco Securities Options Strategy Builder Helps:
With the all-new options strategy builder from Samco, traders do not need to perform complex mathematical computations or worry about confusing jargon before each trade. Samco’s Options BRO only requires minimal inputs to deliver optimal strategy suggestions.
04. Neglecting Advanced Risk Management Strategies
Many options traders focus solely on buying calls or puts and sit back, hoping for favourable price movements. They do not leverage comprehensive risk management strategies like spreads, straddles or iron condors to mitigate potential losses.
How the Samco Securities Options Strategy Builder Helps:
With the Samco Securities options strategy builder, you can explore thousands of strategy combinations and choose the ideal one based on your risk profile. This minimises your exposure to higher risks in volatile markets and prevents substantial financial losses.
05. Difficulties in Managing Multiple Contracts
If you trade frequently in the options segment, you know how difficult it can be to manage and execute multiple option contracts simultaneously in fast-moving markets. You may even have missed several opportunities in the F&O segment or suffered unintended risk exposures.
How the Samco Securities Options Strategy Builder Helps:
The options strategy builder from Samco Securities takes on the responsibility of analysing the market and managing the strategy selection. Then, with the one-click trade option, you will never miss out on any trading opportunity again.
Aligning Your Options Strategies with Your Market Outlook
The options trading strategy you choose to execute depends primarily on your market outlook — which is essentially how you expect the market to move or react during the period till the expiry of the options contracts you buy or sell. Samco’s options strategy builder takes this crucial insight into account and offers trading strategy suggestions depending on your specific market expectations.
Here’s why your market outlook matters and how it influences your trading choices.
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Bullish Market Outlook
When you’re bullish, you expect the market or a particular stock’s price to rise. This optimism about upward movement means you’re looking to leverage gains from an increase in asset prices. In a bullish scenario, you anticipate higher prices ahead due to factors like strong company earnings, positive economic indicators or market trends that favour growth.
Your strategy will naturally involve capitalising on this expected rise. Suitable strategies for a bullish outlook include multi-legged positions like bull call spreads, where you buy and sell call options to limit costs and maximise profits, or bull put spreads to earn premium income with defined risks.
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Bearish Market Outlook
In a bearish market outlook, you believe that the market or a specific asset’s price is on the decline. Your perspective is shaped by expectations of downward trends, possibly due to weakening economic indicators, poor earnings reports or overall negative sentiment in the market.
So, you aim to profit from falling prices and look for opportunities to capitalise on anticipated dips. To prepare for a market downturn, you need strategies that benefit from a decrease in the underlying asset’s price like bear put spreads, where you buy and sell put options to profit from the expected decline, or bear call spreads to collect premiums with a controlled risk level.
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Neutral Market Outlook
Samco’s options strategy builder also helps you trade with a neutral market outlook. Here, you expect the market or a particular stock’s price to remain relatively stable — without any significant moves up or down. This view might stem from a belief that current market conditions will not drastically change in the near term.
Your goal, then, will be to profit from this stability through strategies that capitalise on minimal price movement. This includes strategies like the iron condor, which involves selling both a call and a put spread, or the butterfly spread, which focuses on earning from the premiums while the stock stays within a narrow price range.
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Volatile Market Outlook
When you’re gearing up for a volatile market, you need to brace for significant price swings in either direction. This outlook may stem from upcoming earnings announcements, economic reports or geopolitical events that are expected to shake up the market. Your objective in a volatile environment is not to predict the direction of the move but to position yourself to profit from big swings.
For navigating such uncertain phases, strategies like straddles and strangles are crucial. By employing a straddle, you buy both a call and a put option at the same strike price and bet on volatility without committing to a direction. In a strangle, you buy calls and puts at different strike prices.
Improve Your Trading Success with Free Readymade Option Strategies
By offering readymade options trading strategies at your fingertips, Options BRO from Samco Securities makes it possible to trade quickly and effectively in a market that is rapidly changing. What’s more, these strategies are offered free of charge.
All you need to do is submit a few inputs — like the scrip you’re trading in, the expiry for that contract and your market outlook. With the most optimal options trading strategies recommended and executed within seconds, Samco’s options strategy builder gives you an edge and helps you improve your trading performance.
