Capital Mind Premium has a great chat channel at Slack, and we’ve recently had a very cool addition:
For the next three months Abhijit Phatak (@ap_pune, fondly known as AP) will take us through his analysis, position sizing and risk management skills at Capital Mind Premium’s Slack channel. He’s already shown us how he trades live, and the kind of positions he’s taken. The power of using charts in option trading has been informative.
Here’s a video of how a trade with Tata Steel shaped out as a much higher risk-reward when using options, compared to using vanilla futures instead. AP looked at a bottomin out pattern in Tata Steel’s hourly charts and used an option trade to curtail risk.
(Note: you’re going to need hourly data to work closer with options, especially long options, as the movements are fast and furious).
The trade is interesting in that:
- The primary indication of what to do came from futures and cash charts
- The options layered themselves into a strong risk-reward play
- The trade worked in a very short time – if it didn’t it would hit a stop loss, so no lingering around.
The attraction of options trading is in outsized returns but remember that the risk is equally important. You need to find momentum, but at the same time be aware that there are big risks as well – the best trades are when the risk-reward is pointedly in your favour.
This slack group however is not available to trial subscribers, but we hope the videos show you how the analysis is done and options are traded. This is purely educational – so don’t jump in with the thought of “what do I buy today?” – but more to understanding the concepts of how to leverage option to trade in any kind of market. AP’s entries and exits are also marked and made available to understand the history and logic of past moves.
Note: After three months, there will be a separate product specially for AP’s option moves, which we will notify at a later date. For now, if you subscribe to Capital Mind Premium, you will get this product alongside!
Sign up right now for an annual or quarterly subscription, and you’ll get this and much more. For information, please check: http://capitalmind.in/subscribe .