In The Money

It is crucial for investors to keep tabs on global and domestic developments and stay in sync with fast-changing market sentiment

In The Money: Bringing it all together

This is the last of this 28-article series on how to trade options. It brings it all together in a neat and handy stepwise summary to guide you on your journey through option trading

In The Money | Stuck with a stagnant stock? Go for a Covered Call

When ITC’s shares did not move much for two years, investors’ patience was sorely tested. A Covered Call would have been a perfect hedge in this scenario

In The Money | The special case of expiry-day strategies

On expiry day, we find out which options expire in-the-money and which ones expire worthless or out-of-the-money

In The Money: Use the Calendar Spread, when volatility is expected to increase

Even if the underlying does make a large move, the maximum loss you can incur is the net premium outgo at deployment. In other words, losses are capped

In The Money | Iron Butterfly: An enhancement over the short Straddle

One of the most popular strategies for sideways markets is the Butterfly Spread and in this edition, we discuss the Iron Butterfly that helps cap losses

In The Money | Cover your bases with the Iron Condor

Get more bang for your trading buck with the Iron Condor strategy, that helps cover naked shorts and improves your return on investment

In The Money | Deploy Short Straddle and Strangle for sideways markets

Markets tend to move sideways most of the time, making strategies that require big moves fairly useless. But there are strategies that can be deployed to earn returns in these conditions too

In The Money: Making profits with Straddle and Strangle

After learning about trading strategies that work when traders have a directional view, now it’s time for strategies that work even when there’s no directional view, starting with Straddles and Strangles

In The Money | Profit from sharply bullish views, via the misleadingly named Bear Call Ladder strategy

This strategy can be used to play a bullish view, but it differs from the Call Ratio Back Spread strategy in one respect, you make more money if your call goes wrong. But, there’s a catch

In The Money | Put Ratio Back Spread is the weapon of choice to profit from steep corrections

Put Ratio Back Spread is the bearish counterpart to Call Ratio Back Spread. Just like the Call Ratio Back Spread, it is a three-legged strategy but comprises of put options instead of call options

In The Money | Deploy the ‘Call Ratio Back Spread’ for the big moves

When the market makes a big move in your trade’s favour, this spread strategy helps you reap more gains and even if it moves against you will pocket some gains

In The Money: Enhancing the Naked Short Call via the Bear Call Spread

This week brings the last of the Spread strategies, the Bear Call Spread which is an enhancement over the naked short Call

In The Money | Play the ‘Bearish with Limits’ view using a Bear Put Spread

After learning how to deploy nuanced strategies to play a bullish view, we will now apply these concepts to a bearish view. In today’s edition, we learn about the Bear Put Spread

In The Money | Enhancing the naked short put via the bull put spread

While the Bull Call Spread is an extension to the single-legged long call strategy, the Bull Put Spread is an enhancement over the single-legged short put strategy

In The Money: Play the ‘Bullish with Limits’ view using Bull Call Spread

You can increase your ROI by going for a Bull Call Spread – buy a call option at a lower strike and sell another call option at a higher strike

In The Money: Single-legged option strategies

Single-legged strategies, especially naked shorts, do not have any implicit risk-control mechanism. So, risk management by way of strict position-sizing and stop-losses is paramount

In The Money: Regulations and guardrails in option trading

Knowing the regulations well and the guardrails that need to be in place while trading in options are essential for a successful journey in options trading

In The Money | Max Pain and Synthetic Long

Know all about a cue used to gauge the market’s pulse and also get introduced to an option arbitrage strategy that claims to offer riskless profit

In The Money | Track pulse of the market using Implied Volatility

Rising markets are usually accompanied by low implied volatility while falling markets tend to be synchronous with high implied volatility

In The Money | How to track the market pulse using statistics

How returns are distributed can form the basis for traders to make critical decisions such as setting targets, strike to sell and stop-loss. A primer

In The Money | Take the pulse of the market with put-call ratio

A few indicators can help inform our views on the direction and volatility of the market. Today, we cover the option chain and put-call ratio

In The Money: Key rules of Greek interplay

At any point in time, an option trader must deal with everything changing all at once. The underlying could be trending while volatility is rising, and of course, time keeps passing. So, a successful option trader needs to be hawk-eyed about all of Greeks all of the time, as well as their interactions Ananya Roy

In The Money | Using Vega to navigate vagaries of the market

Higher the volatility higher is the option premium. Vega is the Greek which measures this relationship and it is the change in option premium for a unit percentage change in volatility

In The Money – Theta: Time giveth and time taketh away

We have focused our attention on what’s called the “intrinsic value” of an option – the value of an option attributable to its moneyness. For the sake of simplicity, we have left “time to expiry” out of the equation so far. Now that we are through with intrinsic value, it is time to bring in time-value into our discussion