This is a good question asked by many traders, should i trade in Bank Nifty or Nifty or any other options as a Beginner? The answer is "Yes". But with a certain conditions or some rules you must follow, then you can trade any options with the minimum required capital. Lets understand about in detail. Before that if you do not have Trading account get it for free from here, Upstox or Zerodha.
Rule No 1:- You Must know the Basics of options
Now you will have doubts about what basics you should learn? Its simple, below mentioned are the necessary things you shouldn't miss.
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| Option trading for beginners |
- Know the difference between Calls and Puts.
- Know about the Lot size.
- Know about the Expiry date.
- Know about the Delta value and Theta values.
- Know about the ITM(In the money) and OTM(out of the money)
- Know about the option chain.
There are the must learn points about option trading to start trading with Options.
Rule No 2:- Minimum Capital Required for Trading in Options
This is the second thing, you must know before entering in to the option trading. Actually it varies with the type of options you choose for trading. For example, if you are Trading in Bank Nifty or Nifty options then you can place a order with 4 thousand rupees to 5 thousand rupees. But if you want to trade in stock options or F&O stocks then, you should have minimum capital of 20,000 to 40,000 rupees which varies with stocks and their lot size.
But you should know that, we shouldn't keep the minimum capital instead you should have,
- Bank Nifty and Nifty required minimum capital of thirty thousand in your account .
- For stock Options , you should have a minimum capital of fifty thousand in your account.
Also never take money from others at beginning stage, but use your own capital. Also that capital should not be the whole you have in your bank.
Rule No 3:- Money Management and Discipline
Money Management and Discipline is the most important think you should follow to become a profitable trader. Without this rule, you can't be successful in any kind of trading. Even if it intraday stocks trade or option trade or whatever. So, you must follow this compulsory. Before enter your trade, you must know what will be your risk and what will be your Target, then only you should enter in that particular trade. Every time if you enter in to trade , please add your stoploss instantly and strictly follow them. Also book profits and don't be greedy. If your two or three percentage of your capital hits stoploss, then close the trade for that particular day. Do not overtrade.
You may also read our previous post " Get Lifetime Free Premium Trading Services for New Traders"
Rule No.4:- Prepare well before Market hours
Please prepare before Market hours, Mark the breakout levels etc. and prepare well before Market hours. Keep alerts for the breakout levels and enter in to the right options with good volume to get best results.
Conclusion
So, we have seen the Rules you must follow before entering in to option trading. By following this rules you can reduce the risk and get the maximum benefits from the trading from options. Also please note that option trading is risky but its profitable with this rules.
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