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  • Intraday Option Buying Guide

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    shahav
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    The document provides an overview of intraday option buying strategies. It discusses factors to consider like the role of theta decay when implied volatility increases or decreases, how the direction of VIX changes impact whether to buy calls or puts, and how implied volatility levels and trends in put/call ratios and open interest can provide insight into the market and which options may face higher theta decay. The document recommends using free or paid tools from the company and reviewing a video for a better understanding of applying these concepts to intraday option trades.

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    The document provides an overview of intraday option buying strategies. It discusses factors to consider like the role of theta decay when implied volatility increases or decreases, how the direction of VIX changes impact whether to buy calls or puts, and how implied volatility levels and trends in put/call ratios and open interest can provide insight into the market and which options may face higher theta decay. The document recommends using free or paid tools from the company and reviewing a video for a better understanding of applying these concepts to intraday option trades.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    760 views10 pages

    Intraday Option Buying Guide

    Uploaded by

    shahav
    The document provides an overview of intraday option buying strategies. It discusses factors to consider like the role of theta decay when implied volatility increases or decreases, how the direction of VIX changes impact whether to buy calls or puts, and how implied volatility levels and trends in put/call ratios and open interest can provide insight into the market and which options may face higher theta decay. The document recommends using free or paid tools from the company and reviewing a video for a better understanding of applying these concepts to intraday option trades.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    of 10

    Intraday Option Buying Guide

    www.smartfinancein.com
    How To Buy Option for
    Intraday ?
    Guide to do Intraday option Buying trade
    View the Video Explanation by Visiting this link
    Unique Innovation of Smart Finance Chennai
    www.smartfinancein.com

    www.smartfinancein.com
    Topics of discussion
    • Intraday trade in options using smart finance Free web calculator and
    paid software.
    • Understand the role of Theta in option intraday BUYING.
    • How to Choose whether to buy CALL option or PUT option for
    intraday trade.
    • Understand the role of Implied volatility in Option buying.
    • Understand the role of VIX in option buying.
    • Understand the role of Put call ratio and open interest in option
    buying.

    www.smartfinancein.com
    Intraday trade in options using smart finance Free
    web calculator and paid software.
    • FREE web tool and Android app is manual in nature and trader need
    to input all the data for doing the calculation.
    • To download the Option intraday App and use web app Visit this link
    • We recommend the use of web tool because the web tool has the
    OPTION GREEK calculation Visit this link to access

    www.smartfinancein.com
    Understand the role of Theta in option intraday
    BUYING.
    • Theta is the theoretical per day time decay in the option premium. It
    is linked to Implied volatility .
    • If implied volatility increases during the day then theta decay will be
    LESS as compare to the calculated value.
    • If implied volatility decreases during the day then theta decay will be
    MORE as compare to calculated value.

    www.smartfinancein.com
    How to Choose whether to buy CALL option or
    PUT option for intraday trade.
    • If the VIX is falling more than 1% in a particular day then CALL buying
    will be profitable for the trader on that particular day.
    • If VIX is raising more than 1% in a particular day then PUT buying will
    be profitable for the trader on that particular day.

    www.smartfinancein.com
    Understand the role of Implied volatility in Option
    buying.
    • IV more than 25% is index options has higher Theta decay risk same
    way IV more than 40% in stock option also has higher theta decay
    risk.
    • IV Less than 15% is index options has lower Theta decay risk same
    way IV less than 20% in stock option also has lower theta decay risk.
    • Do not buy the option if IV is more than 25% in index option or iv is
    more than 40 in stock option. This rule is applicable if trailing 10 days data shows a
    only 2 to 3 day data having higher IV else it can be ignored.

    www.smartfinancein.com
    Understand the role of VIX in option buying.

    • Call option buyers use to get benefited from the Fall in the VIX .
    • Put option buyers use to get benefitted from the rise in the VIX.

    www.smartfinancein.com
    Understand the role of Put call ratio and open
    interest in option buying.
    • Put call ratios derived from the open interest play a big role. Nifty monthly
    PCR above 1.1618 indicates bullish trend. Below 0.85 bearish and 1.05 to
    0.95 range bound.
    • During range bound PCR the theta decay will be more .
    • Option strike having higher open interest is more expose to theta decay
    must be avoided for buying.
    • Put call ratios derived from the tradable volume also has a big role. Range
    0.95 to 1.05 PCR derived from the tradable volume indicates range bound
    action any move above 1.168 indicates bullish trend and CALL BUYING
    WILL benefit . Below 0.95 put buying will benefit.

    www.smartfinancein.com
    Conclusion
    • View the video Explanation for better understanding by visiting this
    link.
    • To Give a review on this literature visit this link.
    • To ask your query What app to 9941105705
    • Our other innovations : Trend reversal date using Gann method,
    Finding bottom or top of the market using VIX etc you can learn from
    our you tube.

    www.smartfinancein.com

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