Bank Nifty Options Selling Strategy. Bank Nifty is the most traded index in the Indian share market. Investors who invest in the options try to prefer trade on this script. Bank Nifty is the banking sector index that holds the largest banking stocks and those that have the largest market cap. Bank Nifty is a derivative of those sector stocks. The beginners couldn’t get a way out of the Bank Nifty options trading methods.
Traders get trapped in the hype in the market. Option trading is not a cup of tea for every traders. So you need to be very careful before making Bank Nifty option trading strategy. In there are many factors you need to know about Bank Nifty and how does it works to.
Here we will guide you the proper way how you can do trading and best bank nifty options selling strategy. Open a trading account on Zerodha.
Understanding Bank Nifty
Bank Nifty is the banking sector index in the Indian stock market. The largest banking sector stocks are included into this index. They are the largest market capped stock. The are enlisted in the index. It represents their daily performances. In India Bank Nifty is the most traded index among the option traders. After 2009, when the script introduced in the market it gained the highest popularity.
Bank Nifty is also known as the for it’s volatile nature. The traders can easily earn a good profit in a quick time from the script. The positions can be moved to any direction in such a quick time. The derivative is quick on its movement. So it needs a well pre plan. You need to make the Bank Nifty option trading strategy. The methods are very simple if you follow carefully. Some times the traders over trade and this may cause you to fall in the hype. So the risk will always beyond you and you must take care of it.
Bank Nifty Options Selling Strategy
Always remember, “Buy when you are sure and sell when you are in confusion”. It is a big statement for the traders. Because it has a huge impact. Now let’s analyse Bank Nifty Options Selling Strategy on this statement. Because in stock market all is depends on the buying and selling. So this factor is very curtail for the option traders. Bank Nifty options selling strategy is the profit generator for the option sellers. As it is a quick process and there you have to be very careful before taking any step such as Buy or Sell.
Bank Nifty Buying Strategy
There are lots of strategies trade on Bank Nifty. First the buying options. When the market is pretending to be directional movement and the price movement are in the same direction then you can buy at any position. When the market opens in gap up or gap down and then let the market to fill up the gap. When you can see that market fills the gap on the charts then you can place a buy order at the certain level.
Bank Nifty Selling Strategy
Selling the trade is more important than buying. When the market falling or going up, you need to be patient if you buy the CE option. The best method to sell a option is, follow the candle stick and mark the first highest and second lowest point.
When the second lowest is been broken then you can place a sell order. There should be a marked highest level also. When it breaks the lowest sell the trade. Then wait for the movement and when the chart’s candle stick again hits highest level buy it. The difference points would be your profits.
The most important thing is to use the stoploss while trading on the bank nifty option. We always recommend all the traders to use the stoploss. It might be the saviour for your capital. If any day the market doesn’t go with you you might be fall in a big trouble. So using the stoploss can prevent you from the huge loss. Thus we recommend you to make bank nifty option trading strategy.
Pros and Cons of Option Trading
Option trading is the most volatile trading. It involves much risk to the traders. But although the profitability is also higher. Let’s know the pros and cons in details here.
Pros of Option Trading
There are lots of pros involved in Bank Nifty option trading strategy. It helps the option traders for generating profits.
- Bank Nifty is a volatile script. It fluctuates on the market very quickly. So it helps to quick profit generation.
- If you wanna earn a much percentage of profit then you can invest on Bank Nifty. There you need to make Bank Nifty option trading strategy.
- With e proper process and good methods one can easily earn up to 3%- 5% profit in every trading session.
- Making a good Bank Nifty option trading strategy can take upto you a profitable level.
Cons of Option Trading
All good things have its dark side too. So you should accept the cons of the option trading on bAnk Nifty along side with the benefits too.
- Bank Nifty is a very volatile script, so don’t play with the fire.
- When you predict a certain level movement it might not worked for you. There you may fall in the trap of the option selling.
- Bank Nifty is the banking sector index. So if any government economic rule applies that effects on it. So keep your self updated lways.
- The most important advice is to keep your heart prepare for any kind of situation. Because if you regularly trade on bank nifty then you will face the loss several times. So keep your self for the situation.
Making any decision before the Bank Nifty options selling strategy is the most crucial before buying the trade.
In the end I would recommend you as a financial advisor before entering in to the option trading market try to learn the market and understand its character. Then make some Bank Nifty options selling strategy and Bank Nifty option trading strategy. As I have already discussed that selling is more important than buying the trade. So be careful about your trade and keep patient on the market.
1. Which option strategy is best for Bank Nifty?
There are several strategies for bank nifty option trading strategy. You can use the 5 min charting, price action ratio or the open order interest. The best and accurate way to make Bank Nifty option trading strategy is the 5 min charting method.
2. Is Bank Nifty option trading profitable?
Yes, Bank Nifty trading is profitable when you use the right strategy and if you can predict the market more accurate. Then it could be a profitable trade for you.
3. Which time frame is best for Bank Nifty?
The option trading can be made in between the trading hours. In India the market opens at 9:15 am and closes at 3:30 pm. The best time frame is between 9:15 to 10:30 am and 2:30 pm to 3:30 pm.