VOLUME - 6, ISSUE – 2, JULY.TO DEC,2020 ISSN NO. : 2455-4642 (ONLINE)
IDEES –International Multidisciplinary Research Journal
(Peer Reviewed)
Research Paper
on
OPTIONS TRADING A SYSTEMATIC WAY OF REDUCING RISK &
GAIN PROFIT
By
Prof. Dr. Darshan M. Thakor
Evening Commerce College, VNSGU, Surat
Introduction:
Many traders enter in stock market without any experience or calculations, obviously they
suffer a big loss. If a trader is interested to maximize the profit with minimum risk he has to
plan and design a proper strategy before entering into a particular trade. Technical analysis is
very helpful to design a strategy for a particular trade. Five types of derivatives contracts are
available in the stock market i.e. Forward, Future, Option, Hedge and SWAP, so far is
options contracts are concern technical analysis is very useful for maximization of profit and
minimization of loss. This paper gives the basic guidelines about how to follow option
trading with the help of technical analysis.
Objectives of the paper:
This paper gives the basic idea to the traders to find out the best trading opportunityas well as
best options trading strategy form the selected companies with the help of technical analysis.
Research Methodology:
The study is analytical in nature and based on secondary data. It is based on various technical
analysis tools and option trading strategies to reduce the risk and earn more profit from the
selected trade. For Technical analysis tools are Moving averages, Moving average
convergence and divergences, Relative strength index, and Stochastic, and options trading
strategies are bull call spread, bear call spread, covered call etc.
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