Options Trading In Bear Mkts

Cover
Contents
Chapter 1: INTRODUCTION
	1.1 Objectives
	1.2 Indian Derivatives Market: An Overview
	1.3 What are Derivatives?
	1.4 Evolution of Derivative Trading in India
	1.5 Participants in Derivatives Market
	1.6 Types of Derivatives
	Summary
	Keywords
Chapter 2: UNDERSTANDING OPTIONS
	2.1 Objectives
	2.2 Introduction
	2.3 Options: An Overview
	2.4 Types of Options
	2.5 Advantages of Options
	2.6 Terminologies in Options
	2.7 Trading System
	2.8 Procedure for Margin Collection
	2.9 Types of Orders
	2.10 Settlement Schedule for Option Contracts
	2.11 Settlement Mechanism
	2.12 Writing of Options
	Summary
	Keywords
Chapter 3: OPTION TRADING
	3.1 Objectives
	3.2 Introduction
	3.3 Market-wide Limits
	Summary
	Keywords
Chapter 4: PRICE INDEX
	4.1 Objectives
	4.2 Introduction
	4.3 What is an Index?
	4.4 Eligibility Criteria of Indices
	4.5 Construction of Index
	4.6 Desirable Attributes of an Index
	Summary
	Keywords
Chapter 5: PRICING OF OPTIONS
	5.1 Objectives
	5.2 Introduction
	5.3 Black–Scholes Option Pricing Model
	5.4 Pricing of Equity Options
	5.5 Pricing of Options on Dividend Paying Scrips
	5.6 Binomial Model of Option Pricing
	5.7 Pricing of Binomial Put Option
	5.8 Binomial Multiple Period Model
	Summary
	Keywords
	Appendix
Chapter 6: STRATEGIC DERIVATIVE TOOLS
	6.1 Objectives
	6.2 Introduction
	6.3 Put–call Parity
	6.4 PC Ratio
	6.5 Weighted PC Ratio
	6.6 Volume PC Ratio
	6.7 Tools to Measure Market Sentiment
	Summary
	Keywords
Chapter 7: VOLATILITY
	7.1 Objectives
	7.2 Introduction
	7.3 Types of Volatility
	7.4 Estimating Volatility
	7.5 Estimating Historical Volatility
	7.6 Factors Affecting the Computation of Historical Volatility
	7.7 Implied Volatility
	7.8 Volatility Smile
	7.9 GARCH
	7.10 Impacts of Implied Volatility and Underlying Asset Price on Purchase of Options
	7.11 Volatility Trading
	7.12 NSE Volatility Index
	7.13 Behavioral Study of Nifty Options during Distress
	7.14 Impacts of Events on Volatility—A Case Study
	7.15 Comparative Study of the Behaviour of Nifty and IT Stocks During an Event
	7.16 Impact of Quarterly Results on Stock Futures
	7.17 Volatility Skew
	7.18 Stochastic Volatility
	7.19 Volatility Arbitrage
	7.20 Volatility Change
	Summary
	Keywords
Chapter 8: OPTION GREEKS
	8.1 Objectives
	8.2 Introduction
	8.3 Delta
	8.4 Gamma
	8.5 Vega
	8.6 Theta
	8.7 Rho
	Summary
	Keywords
	Appendix
Chapter 9: OPTION TRADING STRATEGIES
	9.1 Objectives
	9.2 Introduction
	9.3 Advantages of Strategies
	9.4 Buying Put Option
	9.5 Bear Spread with Puts
	9.6 Long Put Ratio Spread
	9.7 Bear Spread with Call
	9.8 Synthetic Short
	9.9 Short Put Ladder
	9.10 Long Combo
	9.11 Long Call Christmas Trees
	9.12 Short Put Albatross
	9.13 Short Straddle versus Put
	9.14 Short Strip with Calls
	9.15 Long Guts
	9.16 Long Call Ladder
	9.17 Long Iron Butterfly
	9.18 Long Put Spread versus Short Call
	9.19 Basic Option Strategies
	9.20 Trading Strategy Adopted by Nick Leeson
	9.21 Short Straddle
	9.22 Long Straddle
	9.23 Covered Call Writing
	9.24 Probability
	9.25 Spread Trading
	9.26 Contango and Backwardation
	9.27 Trading Strategies with Long-Term Options
	9.28 Portfolio Hedging by Call Writing
	9.29 Portfolio Hedging Through Delta Hedge
	9.30 Diagonal Spread
	9.31 Scalping
	Summary
	Keywords
Chapter 10: MARKET INFORMATION
	10.1 Objectives
	10.2 Introduction
	Summary
	Keywords
Chapter 11: RISK IN DERIVATIVES
	11.1 Objectives
	11.2 Introduction
	11.3 Risk in Options
	11.4 Is Writing Options a High Risky Strategy?
	11.5 Classification of Risks
	11.6 Elimination of Market Risk through Hedging
	Summary
	Keywords
Chapter 12: ACCOUNTING AND TAXATION OF OPTION TRADING
	12.1 Objectives
	12.2 Introduction
	12.3 Accounting Norms for Equity and Index Options
	12.4 Charges in F&O Segment
	12.5 Taxation of Derivatives
	12.6 Income Tax
	Summary
	Keywords
Chapter 13: FAQs ON OPTIONS
	13.1 Objectives
	Summary
	Keywords
Chapter 14: DERIVATIVE GLOSSARY
	14.1 Objectives
	Summary
	Keywords
Index