How to Navigate the World of Option as a Beginner?

Options trading involves buying and selling call or put options when you expect the price of the underlying asset to rise or fall in the future. You can take the leverage positions and earn competitive returns while minimizing the loss from options trading.

In this article, we’ll understand how you can start your options trading journey and what are the steps involved in it.

Steps to Start Options Trading

Options trading requires a deep understanding and analysis of how the price of the underlying asset can move in the future. By following these simple steps you can kickstart your options trading journey very easily:

Select a Trading App

The first thing is to choose an option trading app that provides a seamless interface exclusively for options trading. With the right app, you can select from the different options based on your choice and you can place the order quickly.

The app should be registered with SEBI which ensures that the app is trustworthy and you can put your hard-earned money into it. It should offer you a free account opening as well as give you the facility of margin trading.

You should be able to manage different options contracts for various underlying assets such as currency, commodity, index, etc. on the dedicated dashboard and you see how each individual segment is performing.

Decide on Buy or Sell Position

Next, is to choose whether to take buy or sell positions in call and put options. You can buy call or sell put when you have analyzed that the price of the underlying asset would rise in the future. You can buy put or sell call options in case the underlying asset’s price is likely to go down.

You can filter contracts based on bearish or bullish market outlook using the feature called outlook-based ideas available on trading apps. Also, you can choose the contracts based on volume gainers, open interest gainers or losers, most active, etc. using the F&O Screener and Scanner feature.

Use Options Trading Strategies

There are different options trading strategies that you can use in a bearish or bullish market outlook. However, as a beginner, it is difficult to combine different positions and understand the details of each strategy.

The trading app can make your work easy by offering you pre-built options strategies. You can filter out the strategies based on market outlook and execute different strategies such as bull call, bear put, strangle, iron condor, etc. as you deem suitable as per your goals and risk tolerance level.

Conclusion

In order to start your options trading journey, the first step is to select a trading app that allows you to open an account for free. You also need to check other features such as option screeners and pre-built strategies to start your journey as a novice options trader.

If you are looking for an app that can make your options trading journey hassle-free, you can download the Dhan.

versha gupta

Versha Gupta is a tech freak and co-founder of techzimo.com, she spends more of her time searching latest innovations in the tech world. But being a tech freak, she has the same interest in the entertainment world, she watches all the latest web series on OTT platforms and reviews them on Techzimo. Know more about her on Facebbok Instagram linkedin 

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