Options gives a great way to earn money. Each last Thursday of the month is the expiry date of the option being traded for that month. Options can also be traded for more future expiry dates, but they are highy infrequent than that of the current month.
Techniques used while option tardingHow would you trade options on a given day. There are multiple ways to do this. Each method depends on some terms and conditions which may not be true all the time. You may try normal trading techniques like, Butterfly, Straddling, Ladder, Guts, Ratios, etc. Click here for detailed analysis. which may give good results at times. You can also try few complex algorithms like delta neutral, which is very popular among large traders.
Other way is to predict or guess the market values based on the past and current scenario. Try to be realistic. Then take your decisions for buying the call and put options. Wait for sometime. Don't just sell in heavy losses too early. Make your desired profit and come out, if things are looking fuzzy.
Most frequent mistakes done by option tardersThe biggest problem in option trading is hastiness. Most people square off their options before time in fear of further dip. These cases must be identified to make some good profit. Other problem is don't just let your money in the market by looking at today's price only, see the open interest and try to figure out the which side is stronger. You must look at which stock is rising and why? If a stock is having heavy index in Nifty and is increasing with almost no reason, put options may be preferable for that month and vice versa. A very nice article to predict movement based on volume and open interest is Discovering Open Interest.
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