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What is Advanced Trading?

  • Advanced trading means using special strategies beyond simple buy-sell stock trades.
    You can make money in up, down, or sideways markets — just like an all-rounder in cricket!

Why Learn Advanced Trading Strategies?

  • Better Profit Opportunities: Earn from any market trend.
  • Risk Control: Limit losses and protect your capital.
  • Hedging: Reduce big risks during market swings.
  • More Flexibility: Trade in local & global markets.
  • Stay Ahead: Use smart methods that beginners miss.

 

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What Are Options?

Options are contracts that give you the right, but not the obligation, to buy or sell a stock at a fixed price before a certain date.

Options are contracts that give you the right, but not the obligation, to buy or sell a stock at a fixed price before a certain date.

  • Call Option: Right to buy.

  • Put Option: Right to sell.

Example:
Buy call option for stock at ₹100. If price rises to ₹120, you buy at ₹100, sell at ₹120.

Covered Call

  • Sell a call option on shares you already own.

    When to Use:
    When you think the stock will stay flat or rise slightly.

    Example:

    • Own 100 shares at ₹500.

    • Sell call option at ₹550 strike.

    • If stock stays under ₹550, keep premium & shares.

    If it rises above ₹550, shares sell at ₹550, you keep premium.

Protective Put

Buy a put option to protect from price drops.

When to Use:
If you’re long-term bullish but fear short-term losses.

Example:

  • Own stock at ₹200.

  • Buy put at strike ₹180.

If price drops to ₹150, you can still sell at ₹180.

Spread Strategies

  • Spreads involve buying and selling options at different strikes to limit risk.

    Table: Spread Strategies

Straddle & Strangle

  • When you expect big movement but don’t know the direction.

    Table: Straddle vs Strangle

  • Example:
    Buy call & put at ₹100. If stock goes to ₹150 or down to ₹50 — profit. If stays at ₹100 — lose premium only

Futures & Hedging

  • Futures contracts let you agree to buy or sell at a fixed future price.

    Example:
    Own 500 shares at ₹300.
    Sell futures at ₹300 to hedge.
    If price drops to ₹250, loss in shares is balanced by profit in futures.

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Advanced Technical Indicators

Use charts & indicators to make smart trades.

  • Moving Averages (MA): Shows trend direction.

  • RSI: Tells if stock is overbought/oversold.

  • MACD: Shows momentum and trend reversals.

  • Volume Indicators: Confirms strength of a trend.

Tips for Using Advanced Strategies

  • Have a clear trading plan.

  • Use stop-loss to limit risk.

  • Start with small amounts.

  • Keep learning and practising.

  • Backtest your strategies.

  • Stay calm — no emotional trading!

Options vs Futures vs Cash Market

Real-Life Example: Collar Strategy

  • Scenario:
    You expect Stock XYZ at ₹1000 to go up slightly in 2 months but want downside protection.

    ✅ Buy Stock XYZ.
    ✅ Sell call option at ₹1050.
    ✅ Buy put option at ₹950.

    Your profit is capped above ₹1050, loss is limited below ₹950.

    Advanced trading & strategy help you trade smart, protect your money, and earn more even when the market is unpredictable.

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