97% of retailers buy options and lose money.

But, you can buy options:

• At the right time
• For BTST
• When premiums are too low

The difference? Understanding how they work.

Here's how you can buy options if you're a beginner:

Collaborated with @AdityaTodmal

1/ Basic knowledge of Technicals:

Option buying is about capturing the momentum, hence sound knowledge of technical analysis is required.

Without any knowledge, if one is buying an option purely because he/she feels market will rise/fall is equivalent to buying lottery tickets.

2/ Technical Analysis knowledge:

The analysis could involve usage of pure price action or indicators or a mix of both to capture momentum.

Getting the direction right is very crucial, however along with the direction the timing is equally important.

3/ Basics of CE & PE:

Option holders can buy or sell a security at a predetermined price using contingent financial derivatives called options.

In return for such access, option purchasers charge a small amount referred to as a premium to such sellers.

4/ Why CE & PE options are purchased:

CE is an abbrevation for Call Option and PE for Put option.

The CE buyer benefits every time the price of the underlying goes up.

Polar opposite is the PE option, as a PE option buyer benefits every time the price of the underlying falls.