Option Trading Session

The session on Options trading was organised by Finance Club – Harmony. Prof. Shrutika Mishra was the resource person for this workshop. The participants were from MBA First year, those who opted for Finance Specialization & were interested in trading, and also Second-year finance and BA students, with a total of 47 students present for the session. 

Finance Club Harmony had its workshop on 20th January 2023, where Prof Shrutika Mishra conducted the event with Dr Danish Hussain and Prof. Mohit Boralkar. The activity commenced at 12.15 PM in the presence of Prof. Mohit Boralkar, Dr Danish Hussain, Prof. Shrutika Mishra, and MBA students. 

The session started with Ma’am speaking about Option Trading and its meaning. The Speaker also interacted with the crowd with the question, ‘what are Options?’. Then the speakers talked about  the types of options trading Call options(CE) and Put Options (PE). Then spoke about Put Option trading and gave examples related to it. The speakers also gave us insight into how option trading works and gave real-life examples relating to the trade and  how one can decide based on the Market conditions. Adding to the discussion, she spoke about what intraday trading is, how intraday trading is risky, and its benefits. Some questions were raised by the student related to intraday trading by the students! The speaker mentioned that she would show a live example of how Option trading is done using the Intraday Method.

Next, the speaker deliberated on Option Trading, its meaning and concepts related to options, and trends like Bullish or Bearish. She said that a 'Bullish Trend' is an upward trend in the prices of an industry's stocks or the overall rise in broad market indices, characterised by high investor confidence, and a 'Bearish Trend' in financial markets can be defined as a downward trend in the prices of an industry's stocks or the overall fall in broad market indices. Bullish means the market is going up, and bearish refers to the market going down.

Then she spoke about how investors make a profit using insider trading and spreading fake news. Both buyers and sellers profit from the spread of fake news. The speaker showed the website tradingview.com and discussed the NIFTY BANK Live trend chart. The chart displayed the trends for the day of the particular index. Green and red candle sticks signified the movement of the market, and whether that precise moment, they had bearish or bullish trends.  

The speaker talked about the Candlestick and how the length of each candle depends on the robust nature of the buyers and sellers and the Wick of the candle, how both buyers and sellers work against each other to decide upon the length of the wick. Based on the NIFTY Bank Index chart, she gave an example explaining the above. Bullish Trend -Green Stick(buyers active, but sellers were more robust, so the candle closes) and Bearish Trend-Red Stick(Sellers were active, but buyers were more active, which closes the candle). The resource person also spoke about premiums and predictions based on the strike price. So if the investor predicts out of the market, they will have to pay a lesser premium, and if the prediction is closer to the strike price, the premium increases as there is high competition.

After that, she spoke about the Option Time decay concept, which might cause losing money, and gave some insights into it. Then the speaker showed us a practical example of how you can apply support and resistance based on which the traders can predict whether the market will be bearish or bullish. She mentioned that traders would often use support and resistance for one year period, but she showed us, for six months, also about the resistance that if the trend continues for 15 mins, the market sustains it will have a bullish trend. The speaker spoke about how traders behave in the market. A good trader would only trade for three days and watch for the next  two days. Then the speaker discussed three strategies to understand and try options trading based on 15mins and 5 mins candles of 20 points limit up or down. These limits can be changed per the trader's confidence and experience.

● Morning Strategy for 15 mins(if the market opens in bearish/bullish nature) 5 mins per candle, ie. 2 candles. So before three 5 mins candles, one can buy for 20 points in a bullish trend, sell for 20 points in a bearish trend(stop loss), and exit the market.

● Using Indicators(Moving method Strategy)-observe the wick and exit the market if each candle goes below 20 points again. Scalping and exit. The longer the wick, the greater chance of rejection and more opportunity to earn profit.

● Inside Candle Strategy- for both bearish and bullish markets, check for 20 points and exit the market.

The event ended with a Q&A session where students interacted with the speaker regarding the website and other related issues. 

The event was interactive and full of zeal, enthusiasm, and curiosity. Students were able to self-analyze and apply their knowledge and were able to learn new things related to Options Trading.