I have observed many retail traders trading options purely as a directional bets. Most of them are not aware of the basic properties of the Options Instruments they are trading.
- NSE has to its credit prepared a freely downloadable material on Options Trading Strategies
- How many retail traders are aware of Volatility trading and Caluculation of Implied Volatility
- Sharekhan has a nice caluculator based on Excel here
- What I observed in Indian Brokerages is lack of basic market understanding which is a prerequisite for market participation.
- The best antidote to this situation is a thorough reading of Trading & Exchanges by Larry Harris available at any college book store at hugely discounted price of Rs 300 ( $6) in India. This should be made mandatory before any trade is entered.
- I think many trading demons can be exorcised with good reading as suggested by Victor and also repeated in this site. My favorites are the two by Victor & Laurel, the three by Brett and one by Larry Harris which are minimum for any educated speculator.
- Excellent discussion of Options Trading here
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