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.
Business News
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.
- Own 100 shares at ₹500.
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
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Feature
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Cash Market
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Options Trading
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Futures Trading
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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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