The speaker is offering a free series on YouTube to teach option trading. The series is designed for beginners and aims to help them understand the basics of option trading and how to minimize losses while maximizing profits.
Option trading is explained in simple terms, comparing it to buying insurance for a car. The speaker uses examples of buying shares of a company and buying put or call options to illustrate the concept. The speaker emphasizes the importance of understanding the market, the difference between being a buyer or a seller in option trading, and the concept of theta decay, where the premium cost reduces every day as the expiry date approaches.
The speaker then introduces the concept of expiry in option trading, which is similar to the expiry of a contract where the buyer and seller can walk away at any time. The speaker also explains the concept of break-even, which is the point where the buyer breaks even with the seller.
The speaker demonstrates how to trade in options using a live example of a chart, showing how to buy or sell call or put options based on market predictions. The speaker explains the concept of delivery, which is when the option contracts expire, usually on a Thursday. The speaker also explains how to buy options for different expiry dates, with the rate increasing as the expiry date gets closer.
The speaker concludes the video by summarizing the key points and encouraging viewers to share the video so more people can learn about option trading. The speaker emphasizes that learning option trading should not be complex and that the goal of the series is to make learning as simple as possible. The speaker invites viewers to open a Demat account if they haven't done so yet, as it is necessary for option trading.
1. The speaker is offering a free series on YouTube for those interested in learning option trading. The series aims to provide a comprehensive understanding of option trading from basic to advanced levels [Document(page_content="00:00:00.83: Well, many of you are interested in learning option trading. Well, today I would like to give you a commitment. A commitment has come from me that you are going to get a series that is free of cost in which you will learn basic to advanced option trading. I am assuming that you are at the base level. Today you have taken this decision that you have to learn option trading in detail, but you stay with me in this series. What does the series mean that not only one video will be available, but you will get multiple videos free of cost online on YouTube.")]
2. The speaker explains that option trading is like taking insurance. If the price of a stock falls and the trader has bought a put option (an option to sell the stock at a lower price), they can profit even if the stock price falls [Document(page_content="So we will directly focus on options. So you have an option available. The option is that if you are afraid that the price can fall, then you can buy a put option. So I wrote PE here. PE means put European. Similarly, if you want an option in this way that if the price of Reliance increases, then I have more profit. So it can also happen that you have to buy CE, call European. So you buy an option, as I said, you buy a put option, then what happens with this? It becomes hedging. What is hedging? If the price of Reliance falls and you have a significant amount of put options available, then as the price of Reliance falls, you will have a profit here. It means that even if the price of Reliance falls, you will have a profit in the put option. So definitely for this, you have to give a premium. Like we take insurance. The car costs us 50 lakhs. Insurance costs us 50,000 rupees. So why do we pay 50,000 rupees? If a car worth 50 lakhs is stolen, damaged, or has an accident, then there is no loss of 50 lakhs. That's why we pay 50,000 rupees. Similarly, put option will not come for free. For this, you will pay some price. Now what is the price? We will learn what happens in this series. For now, you have to understand that you have given a premium for the put option. Now what happened by giving a premium? You took insurance of 50,000, but if the price of Reliance falls, then you have hedged. You did not lose. The loss of 1 lakh could have been a profit of 1 lakh here.")]
3. The speaker explains the concept of margin in option trading. The margin required for buying or selling an option depends on the price of the underlying asset and the premium paid for the option [Document(page_content="Now what is the margin? When a shopkeeper opens a shop, then there is a lot of stuff there. His money is more. That's all. So here if you want to become a seller, you need more margin. You need more money. Okay number one. Second, if you want to buy, then you will give money for the thing you want. So his money will be very less. Let's give one more example. You are buying insurance for a car worth 50,000 for a car worth 50 lakhs, then you may have to give 50 lakhs to the seller if the car has an accident or the car is damaged. Risk of 50 lakhs of the seller and the one who has taken the insurance has given 50,000 rupees. What is the maximum risk? 50,000 rupees. So the buyer takes less money, the seller takes more money. But so many insurance are sold in the market. Is the company making money? If the company does not make money, then why will the insurance sell? So the probability of winning is always more of the insurance company. Because