Bank Nifty options chain analysis is required to choose strike price and volatility

1. Bank Nifty options chain analysis is required to choose strike price and volatility

2. First of all we should know what Option chain is and then know how to use it for option trading in real and live market. This may be of stocks or index. This is generally a list of all contracts available for a particular stock or Index. Many traders get confused to select strike price and lose money due to lack of fundamentals. We will discuss step by step and you can know where you may find option chain analysis to learn. There are only two types of option contracts for index or stocks. One is Calls and other one is Puts. Here we will discuss about Index option which is Bank Nifty. Bank nifty is more volatile than Nifty and stock market trader should carefully choose strike price to trade technically and do technical analysis. Bank Nifty Option chain is a list of all available option contracts in Bank nifty index. In one place you can find all contracts which are call and put of different strike price. You can find ask and bid price with volume. Here option trader can find daily BankNifty Today trend posted daily with technical trend which helps trader to trade in Options and learn technical analysis because without technical analysis it is too difficult to find trend and trade in Options and Future.

3. Below you can find Bank Nifty Option chain image to understand option chain better. You can find different strike price, volume and price of contract with open interest to choose which contract you should trade with. This helps only to choose contract but doesn’t indicate any trend. In this kind of contracts while trading in Option Chain it is always advisable to choose “At the money” contract or “In the money” contract which price are more than 100. Here question arises why? Let’s take an example. Example Let say you have taken Call option having price Rs 30/- which is out of money. I have taken Call option having price Rs 100/- and Nifty move up 30 points. Now in the same time my option chain price will increase to Rs 125/- and your price will increase to Rs 35/-. I am here getting a good profit and any time I can book profit if technically indicating exit point, so in the money and at the money contract moves parallel to market. But here you will be trapped by psychology of small profit and greed will lead to loss. Here technical analysis plays an important role. So Bank Nifty Today trend is more important in finding daily technical trend of Bank nifty posted daily before market open. This is used by a lot of traders in India. Common term used in option trading.

4. At the Money- Here the market price and strike price is same. Let’s say current market price is 29500 then at the money strike price is 29500. In the money- In case of Call and Put find the strike price from where the price is increasing from current market price. In below image 29400, 29300, 29200 are in the money Call option and 29600, 29700, 29800 are “In the money” Put option. Out of Money- In case of Call and Put find the strike price from where the price is decreasing from current market price. In below image 29600, 29700, 29800 are “Out the money” Call option and 29400, 29300, 29200 are “Out the money” Put option.