Intraday trading, also known as day trading, is a popular strategy among traders who buy and sell securities within the same trading day. Intraday calls are a type of options contract that gives the holder the right, but not the obligation, to buy or sell an underlying asset at a specific price on or before a certain date. In this article, we will discuss how to trade with intraday calls in 2023.
Before you start trading with intraday calls, it is important to understand the basics of options trading. An option is a contract that gives the holder the right, but not the obligation, to buy or sell an underlying asset at a specific price on or before a certain date. The price at which the holder can buy or sell the asset is called the strike price. Options come in two types: call options, which give the holder the right to buy an asset, and put options, which give the holder the right to sell an asset.
Intraday calls are a type of call option that can be exercised on the same day they are bought. This means that if the price of the underlying asset rises above the strike price during the trading day, the holder of the intraday call can exercise the option and buy the asset at the strike price, even if the price is higher at the end of the day. Sharekhan talks in extreme detail about this topic.
To trade with intraday calls, you will need to have a brokerage account and some capital to invest. You can open a brokerage account with a traditional stockbroker or an online brokerage firm. Once you have your account set up, you can start researching different assets to trade with intraday calls.
One important thing to keep in mind when trading with intraday calls is that the price of the underlying asset must be expected to rise within the same trading day. Therefore, you should research and analyze the asset you are interested in, looking at factors such as its historical price movements, current market conditions, and any news or events that may affect its price.
You can also use technical analysis tools, such as charts and indicators, to help you identify potential trading opportunities. For example, you may look for chart patterns, such as head and shoulders or flag and pennant, that indicate a possible price reversal.
Once you have identified a potential trading opportunity, you can place an order to buy an intraday call option. The option will have a strike price and an expiration date, which is the date when the option can be exercised. The price of the option will depend on the strike price, the expiration date, and the price of the underlying asset.
When trading with intraday calls, it is important to have a plan for managing your risk. One way to do this is by setting stop-loss orders, which will automatically close your position if the price of the underlying asset falls below a certain level. You can also use other risk management techniques, such as position sizing and diversification, to help limit your potential losses.
In summary, trading with intraday calls can be a profitable strategy for traders who are willing to take on risk and have the knowledge and skills to research and analyze the market. By understanding the basics of options trading, researching assets, using technical analysis, and managing risk, you can potentially profit from intraday call options in 2023. However, it is important to remember that trading in the stock market carries risk and it is important to invest only what you can afford to lose.