The option chain is a table consisting of various information that helps in buying and selling. It also contains calls and puts, stock prices, expiry, and money movement. Various financial services show option chains in different forms. Though there is a slight variation in the representation of option chains in different websites and apps, once you learn to read these tables, then the differences won’t matter.
The option chain calculator makes it easier for you to read this table effectively. By using the LTP calculator you can track key metrics like Option chain, open interest, volume, price change, etc.
This article helps you with strategies to use with an option chain calculator for intraday trading.
Intraday Strategies Using Option Chain Calculator
- Momentum Strategy:
This strategy helps you know the momentum and get better profit from the market. This includes tracking the proper stocks before a major change occurs in market trends. This helps traders to buy or sell in the option chain. The selection of stock depends upon the latest news, announcements, quarterly results, and so on. Intraday traders have to be updated with such news about stocks in their watchlist and place call or put options. As the price fluctuates based on such factors, the option chain calculator helps intraday traders make quick decisions to gain more profits. The duration for holding stocks depends on the market momentum.
- Breakout Strategy:
Timing is an important factor when buying or selling shares in intraday trading. This strategy includes identifying stocks that have broken the range of their regular price. LTP calculator assists in trading at a new price range. Traders also need to find the main levels at which share prices increase or decrease. If the stock price moves above these levels, traders can go for a call position. If the stock price drops below the main levels, then a trader can opt for a put.
- Reversal Strategy:
This is a high-risk trading strategy. In this, the investment decisions are made against the market trend depending on the analysis and calculations. This is the most challenging strategy as the trader needs to have complete knowledge about the market. LTP Calculator allows you to know the strengths and weaknesses of a stock.
- Scalping Strategy:
In this strategy, traders make constant profit from small changes in price. This is preferred by intraday traders when trading on commodities. It is better for traders who are involved in high-frequency trading. The price action is more important in the scalping strategy. One who opt for this strategy needs to select shares that have good liquidity and volatility. They also need to put a stop loss for each order.
- Moving Average Crossover Strategy:
This is the widely used option chain intraday strategy in India. When the price of stocks moves above or below the moving average, it marks an indication of a change in momentum. If the price moves higher than the moving average, it is an uptrend and when the price is lower than the moving average, it indicates a downtrend. When it is uptrend, experts recommend buying or making a long position. Similarly, when there is a downtrend, traders make short positions or sell their shares.
- Gap And Go Strategy:
This strategy involves identifying stocks that don’t have any pre-market volume. Such stocks have a gap opening. When a stock opens at a higher price than the previous day’s closing price, it is known as a gap up. If the stock opens lower than the previous day’s closing price, then it is referred to as gap down. Intraday traders use LTP calculators to identify such stocks and buy them assuming that the gap will be covered before the closing bell.
Conclusion
Option chain involves various strategies that make your investment profitable. With these strategies you can easily decide on a “put or call” position based on the volume, price movement, and so on.
Using an option chain calculator or LTP calculator allows you to track the price movement, breakouts, analyze support and resistance levels, important market movement, and so on, so that you can make informed decision trading.