Nifty option chain price
This lesson will walk you through a step-by-step process of understanding a stock option chain. I'll send you daily emails to guide you through the course and from time to time I'll send trade alerts so you can see what I trade in real time.
Discover five ways to achieve financial freedom in five years or less by entering your email to the right unsubscribe at anytime An option chain is a list of all the stock option contracts available for a given security stock. Learning how to read an option chain is a vital component to options trading. Many traders lose money because they don't fully understand option chains.
There are only 2 types of stock option contracts, Puts and Calls, so an option chain is essentially a list of all the Puts and Calls available for the particular stock you're looking at.
Now that wasn't so hard to understand was it? Well the confusing part comes when you actually pull up a stock option chain. All that easy-to-understand information suddenly gets lost in translation and you're left looking at a table full of numbers and symbols that make absolutely no sense at all.
Before you learn how to read an option chain, let's do a quick recap of the 7 step trading process thus far:. If you go to Yahoo, MSN, CBOE, or your brokerage account and pull up an option quote, you will notice that the layout of each of their option chains is completely different.
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Let's use a snippet of the stock option chain listed above, which is a Yahoo stock option chain of the stock symbol "MV":. Expiration Months As you can see from the picture there are several different expiration months listed horizontally across the top of the option chain Aug 09, Sep 09, Dec 09, etc. For our example we are looking at all the call and put options that expire the 3rd week of December Some traders want to stay in a trade 1 week, some want to stay in a trade 2 months, so your trading plan will dictate which month you look at.
I like to give myself plenty of time for the trade to work out so I always try to look at options that expire months from the current date.
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Calls Options and Put Options Each stock option chain will list out all the call options and all the put options for the particular stock. Depending on which option chain you are looking at, the call options may be listed above the put options or sometimes the calls and puts are listed side-by-side.
Strike The first column lists all of the different strike prices of the stock that you can trade. X" is the ticker symbol for the 09 December 25 call option. The symbol identifies 4 things: Last The third column lists the last price at which an option was traded was opened or closed.
It's the price at which the transaction took place. Be aware that this transaction could have been minutes, days, or weeks ago, and may not reflect the current market price. Change Chg The fourth column lists the change in the options price. It shows how much the option price has risen or fallen since the previous day's close.
Bid The Bid price is the price that a buyer is willing to pay for that particular stock option.
It's like buying a home at an auction, you bid offer what you are willing to pay for the home. When you are selling an option contract, this is usually the price you will receive for the stock option.
Ask The Ask price is the price that a seller is willing to accept for that particular stock option. This is the price the seller is "asking" for. So when you are buying an option contract this is usually the price you will pay for the stock option. This will be the actual cost of the contract. Open Interest Open Int This column lists the total number of option contracts still outstanding. These are contracts that have not been exercised, closed, or expired.
The higher the open interest, the easier it will be to buy or sell the stock option because it means a great deal of traders are trading this stock option. In one of the previous lessons you performed stock trend analysis to find trades. Let's pretend you found a potential trade. You then look over the option chain and pre-select the option you're going to buy or sell.
When you are looking at the stock option chain there are 7 factors that will affect what stock option you choose:. You're either going to look at the Call option or the Put option portion of the option chain.
If your analysis tells you that the stock is going to rise higher, you evaluate the Call option portion of the option chain.
And vice versa for Put options. Duration The next step is to figure out how long you plan on staying in the trade. If you want to give the trade 2 months to work out, then you look for options that are going to expire 3 months out. Why 3 months out? It's because the options time value decays rapidly the last 30 days of it's life.
Stock Option Chain | Learn How to Read Option Chains
At-the-Money ATM This rule is simple. You're going to pick the At-the-Money ATM stock option. This rule was also covered in the strike price lesson. Can you afford the option If you can't afford the ATM option, then you can look for a closer expiration month or move on and find a trade on a stock where you can afford the stock options.
Open Interest Only buy stock options with an open interest of or higher.
This ensures that there are enough people trading the option to make it worth your time. The more people trading the stock option, the easier it will be to buy and sell the option. Comparison Shopping Here you simply look for the best value.
Check out the price of stock options for other expiration months and see if you can find a good deal. Maybe you will find a stock option that expires 2 months later, but only costs a few dollars more. Also keep in mind that you have to multiply the cost by In the next lesson, you'll see how all of this plays out in a real trade. Message from Trader Travis: I don't know what has brought you to my page. Maybe you are interested in options to help you reduce the risk of your other stock market holdings.
Maybe you are looking for a way to generate a little additional income for retirement. Or maybe you've just heard about options, you're not sure what they are, and you want a simple step-by-step guide to understanding them and getting started with them. I have no idea if options are even right for you, but I do promise to show you what has worked for me and the exact steps I've taken to use them to earn additional income, protect my investments, and to experience freedom in my life.
Five Option Trading Strategies I've Used to Profit In Up, Down, and Sideways Markets We respect your email privacy. Options Trading Made Simple Book. Marketclub Options offered via Marketclub. Return to Learn Stock Options Trading Home Page. Or Proceed to Trader Travis's YouTube Channel. The Options Trading Group, Inc.
All stock options trading and technical analysis information on this website is for educational purposes only. While it is believed to be accurate, it should not be considered solely reliable for use in making actual investment decisions.
Futures and options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed in this video or on this website.
Please read "Characteristics and Risks of Standardized Options" before investing in options.
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SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. Suite C , Lewiston ID Free Options Course START HERE PLEASE Module1: Option Basics Module 2: Option Value Module 3: Option Strategies Module 4: Stock Charts Module 5: Using Indicators Module 6: Final Summary Trader Travis's Story Products Coaching Programs Student Success Stories Automate Your Trading.
Option Basics Explain Option Trading Trading Stock Options What are Stock Options Understanding Stock Options Puts and Calls Options Trading Basics Review Module 2: Option Value Stock Option Valuation Understanding the Strike Price Option Greeks Option Value Review Module 3: Basic Strategies Option Trading Strategies A Married Put A Protective Put Buying Put Options Trading Put Options Buying Calls Call Option Trading Writing Options Covered Call Options Module 4: Technical Indicators Module 6: The 7-step process I use to trade stock options Online Stock Options Trading How to Trade Stock Options Stock Options Trading How to Read an Option Chain Online Options Trading your turn.
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Copy and paste it, adding a note of your own, into your blog, a Web page, forums, a blog comment, your Facebook account, or anywhere that someone would find this page valuable. Option Basics Explain Option Trading Trading Stock Options What are Stock Options Understanding Stock Options Puts and Calls Options Trading Basics Review.
Option Value Stock Option Valuation Understanding the Strike Price Option Greeks Option Value Review. Basic Strategies Option Trading Strategies A Married Put A Protective Put Buying Put Options Trading Put Options Buying Calls Call Option Trading Writing Options Covered Call Options.