Can you earn risk free return in stock market ?
Let's list out few concept where we can earn risk free return in one day or one hour only.
Do you believe risk free return one can earn based on opportunity?
Yes, I will share my experience with you people I.e. opportunity based trading
What is it ?
1). One can do trade based on opportunity arises. Let's talk more focus on practical example.
During result season Tata motor open at LC and reach max 25% near 129 Rs.
What People do in market?
Basically, when such event arise people do trading. Trying to buy stock at lower level but who knows exact bottom "Bhav is bhagvan".
Anyway in option we can try to capture in the money put at upper daily price range (DPR).
Example: Tata motor 170 put upper DPR was 10 Rs while we were known for rate opening below 165. For new DPR and many naked option holder sells put at any price. Try to buy or put limit during market opening only.
Only we should sure for gap down more than 10% or gap up of 10% or more.
We have plenty of example like yes bank moved 35% plus ZEEL enterprise down 50% and DHFL, Reliance infra and capital many more.
For gap down one can buy put option at higher DPR while gap up we can try for call option.
To understand DPR is daily price range. For stock DPR can be 2% 5%,10%,20%. While stock in future there is 10% price range once it touch again it open 5% and so on. For future stock they is no limit for stock to go up or down. Same way for option depends on Delta of particular option new DPR set.
So, trying to buy put or call when there is up or down circuit and stock still go beyond that level in any side either up or down.
2). Another opportunity based work I am talking for .....
For any stock going down let's say Tata motor made a recent low of 130 and back to 150 now what to do with Tata motor.
Try to buy 140 put option and sell 160 & 170 call option where net premium comes plus with hedging of future buy.
So, position can be.....
Buy 140 strike put having delta of 0.40
Selling 2 lot of call 160,170 having delta of 0.40 & 0.30
Buy one future of Tata motor @ 150
So, net theta value will be plus and slowly stock going up the Implied volatility of Tata motor from 90 reduce to 60 on the same day. Now, say I made Vega value of Rs. 5000 I will easily make 1,50,000 in Vega value moreover I will earn theta also if i hold for few days.
So, downside i am having very limited risk while upside always volatility will reduce and i will make profit more from volatility compare to stock moving up.
3). Apply in good initial public offering where lot of good company coming for listing.
Example: Demart issue at 300 open at 1000 rs.
4). Try to invest in CPSE ETFs so one can earn minimum discount offer to subscriber it may be 3 to 5% taking 2 lakh investment simply give 6000 to 10000 in 15 days by assuming market to be stable here only.
Special techniques of earning from stock market.....
1) One can participate in pre decided block deal where stock deal use to do around 3-5% from current market price, as the price goes down without any reason just for changing hand of investor. It will back again in few days.
2) Even buy back of shares this days is very famous and popular after HEG LTD it made lot of investor to study such offer. Even WIPRO came with buyback rate 17% up from current market price just put for shareholder approval.
So, there are lot of opportunity where one can easily earn good amount when such opportunity arise.
Happy Reading
Derivativelearn.
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