How much money is required to start options trading to successfully earn a living in India?
I know many would be stumbling for an answer. How much money to start options trading is a cornerstone to start your career as an options trader.
- Do you want to start a new career as a day trader?
- Have what it takes to make a living out of options trading as a job?
- Would you be interested to lose again and again, but still be motivated to earn a living with options trading?
If you said, yes to at least 1 or all of the questions above, I would ask you to read the whole article below.
I’m greatly influenced by stock market books before starting my trading career.
I was a failure in the beginning when I started trading during my 2007 – 2008 years in day trading.
I’d buy Infy shares and sell it at just Rs.1 profit. As a result of this, on my first day with a profit of 15 points in Infy, my takehome was -Rs.1800.
Then I put in lot more money to lose more as I was gambling stocks rather than trading.
I’d always think, today, I’ll make more money because today’s the market is going up. So I’d buy Aban Offshore and it would fall!
Freaking Heck! I’d constantly look for just 10 points buying 100 shares of ABAN Offshore stock. But I never gained even once. As a result, my stock trading turned out daily into gambling.
Later, it started becoming an addiction! Then I realized how much, I lack the knowledge and reading about options.
So let’s together discuss the journey about options trading and in particular, how much money to start options trading.
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Why Options Trading is So Addictive?
- Just like any gambling, options trading is addictive! You can see lotta money by a 100% increase in options. As a result of this, I stumbled, this one day, I’ll make a lotta money. But never made it.
- As the trader’s initial luck, I used to make money after every new start and lose big every time. Because of this, every time, I invest money in my account, It would drain out to the last pie!
- Options trading is less investment and more profit, as it seems, but is less investment but lotta loss. Technically I was unsound to make any profit outta the instance market poses.
- The market gives opportunity always but used to reverse as soon as I bought. As a result, the greed set in, that this time, I’ll earn big, every time.
- As always, options are very lucrative provided you know good technical analysis. But totally disastrous in case you are just trading with intuition.
What Options to Choose and Trade Regularly?
Now that, there is a weekly option, monthly, two month and three-month expiry options, and every index and F&O stock has options. As a result of this, beginners are confused as to which one to trade and select.
So let’s understand which options to choose to make a regular income.
What timeframe options to choose for options trading?
A) I’d suggest choosing a monthly option. Lemme tell you why. Because of its time frame, its time decay is less, and it’s less volatile.
Which underlying asset options to select for trading?
A) So when it comes to selecting which underlying asset to choose, I’d always suggest choosing an index.
Why choose an index option vs stock options?
A) Because of the fact that index options are very liquid. Meaning, you gotta choose to sell at any time and the option is sold at that level.
Why not choose stock options?
A) Because you get to only have 1 option to select always to trade, rather than have 1000s of options of different stocks to trade. Why complicate your life, when things can be this simple!
I’d strongly suggest you read, Is Options Trading Better Than Stocks before deciding on trading options.
Is Day Trading A Good Idea Actually for Real People?
A) Absolutely Yes. I wrote an article supporting my argument. Read Here.
What Options Trading Level Should I Choose?
A) I suggest trading options within the range of Delta 0.2 to 0.7. As a result of this, you’ll not make too little of a return or too great of a loss.
How Options Trading Works In India?
A) I’d suggest you read post 1 and post 2 to get the answer to this basic question.
When Does Options Trading Close?
A) It’s the same trading hours of futures trading. Timings of futures trading are noted in the article linked here.
Where To Start Trading Options?
A) I’d suggest as a start to learn with any of these options trading courses before starting to options trade in India.
How Much Money To Start Options Trading?
Now comes the gist of the article. Let’s understand the financial part of the options trading in this segment below.
How Options Trading Make Money?
A) You either buy a CE (Call) or a PE (Put) lower and sell higher to make money. Or you may sell a CE/PE, buy low to make money with options trading.
Can Options Trading Be Profitable?
A) It’s uber profitable. Because I’ve devised a daily profit formula to gain consistent returns with my options trading. In case you’d like you may check out my Nifty Intraday Options Trading course.
Can Options Trading Make You Rich?
A) I cannot say, I’m rich in trading options. But, it can give you a more lucrative career with higher returns than your job. Also, I can surely say, you never have to report to anyone again in your lifetime.
Can Trading Options Put You In Debt?
A) In case you trade without the knowledge of technical analysis, and are not a seasoned trader, you may end up in debt. Just like any other gambling out there.
That being said, I’ll give you an exact answer to your question.
How Much Money To Start Options Trading?
A) It depends on the lot size of the asset for which option you wanna trade. Assuming, you wanna trade Nifty options, which lot size is 75, and to trade an option premium of 100, you’d require – 100 * 75 = ₹7500. If you wanna trade Infy, with a lot size 600, a premium of ₹15, you require – 600*15 = ₹9000.
So now you know how much money to start options trading. In case you don’t still have an options trading strategy, go through my nifty trend calculator strategy.
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Happy Trading and Happy Money Making!