Buying & Selling v/s Option Strategies
Once you’ve analysed what symbol you want to trade in, and have some market view about it, the next step is to decide what position you want to take. Buying and selling naked call and put options is a common strategy used.
But before making a trade, you want to be sure that it is right for you. That’s where the strategy builder comes in.
What you can do with Optionlogy's Strategy Builder
- View payoff of any option trade or strategy
- View stats such as Max Profit, Max Loss, Risk Reward Ratio, Probability of Profit & more
- View greeks and PnL table
- Build ready-made strategies (more on that in the next chapter)
- Build strategies with live Option Chain (read more here)
- Control your strategy - shift the payoff to the right or left, or reverse a strategy without any calculation from your side. More on this in the Strategy Controls section.
- Make a paper trade or trade directly with your linked broker in once click. To read more on how to link your broker with Optionlogy, click here.
Phew! That’s a lot! Let’s take it step by step with an example.
How to Buy/Sell Options with the Strategy Builder
Step 1
Login (opens in a new tab) to your Optionlogy account, or sign up (opens in a new tab) if you’re a new user; and go to All Tools > Strategy Builder (opens in a new tab)
Step 2
Select the symbol you want to trade in and it’s expiry. Let’s say we're bullish on Nifty, and we want to go for the monthly expiration date.
Step 3
Adding our orders
Now for our bullish market view, have two options - buying a call or selling a put. The slight difference in market view here is when we buy a call, we pay a premium and then however bullish Nifty ends up, we ear that, whereas by selling a put, we receive a premium and as long as Nifty is below our strike, we are in the profitable zone.
Let’s go with option 1 - buying a call. Go to the Option Chain.
On the left side you can see the calls, and on the right, puts.
Let's buy an OTM call of 18300 strike here.
Click Done and you will be taken back to the Strategy Builder.
Step 4
You can see your position’s payoff on the right and its stats on the bottom left. If you’re satisfied with this, you can trade in one click with your linked broker, or make a paper trade where no real money is involved.
Step 5
Confirm your order in the window that opens.
Now it will be auto tracked in Orders and Positions. Here you get strategy-wise PnL tracking and some amazing features that we can’t wait to tell you about. Read more about Orders and Positions here.
Why One Click Execution?
Trading is all about identifying market opportunities at the right time. Now imagine spending hours learning and creating the best strategies, maximising your probability of success and risk-reward ratios, minimising your max losses etc - and losing out at the final step! That’s what happens when you’ve to add every single position individually with your broker, because the market fluctuates.
Worse, when there is high volatility, we tend to make errors in a hurry.
We’ve solved this once and for all with our One Click Execution. Whether it is a paper trade or, you’re making a real trade with your linked broker, with one click, all positions of your strategy can be executed simultaneously.
While buying and selling options can be a quick and easy way to enter the market, it can also be risky and unpredictable. Building option strategies, on the other hand, can offer a more controlled and hedged approach to option trading. By combining multiple options, you can create a position that can profit from market movements in a more predictable way. A strategy builder can help you find the right strategy for your trading needs and maximise your profits in the options market.
If this sounds complicated, don’t worry. You can create option strategies trusted by traders with 10+ years of experience, within seconds - even if you’re a novice. This is done through our Strategy Builder and Strategy Finder.
To see how these two are different and which might be right for you, click here
In the next chapter, we’ll explore how you can use the Strategy Builder to create option strategies within seconds.