1. What is Technical Analysis? Technical analysis is a method used by traders and investors to evaluate financial markets and forecast price movements based on historical price data. Unlike fundamental analysis, which examines a company’s financial health, technical analysis focuses…
Rho measures how much an option’s price changes when interest rates rise by 1%. Call options have positive Rho, meaning they increase in value when interest rates rise, while put options have negative Rho, meaning they lose value when interest…
Vega measures how much an option’s price changes with a 1% change in implied volatility (IV). Higher Vega means an option is highly sensitive to changes in volatility, while lower Vega means the option is less affected by volatility swings…
Theta represents how much an option’s price decreases every day due to the passage of time if all other factors remain constant. Since options have an expiration date, their value erodes over time, especially for ATM and OTM options. Theta…
Gamma measures how much Delta changes when the underlying index moves by 1 point. Since Delta itself changes as the price moves, Gamma helps traders understand how quickly an option’s price will react to changes in the underlying index. A…
Delta represents how much an option’s price is expected to change when the underlying index (Nifty or Bank Nifty) moves by 1 point. Call options have a positive Delta (0 to 1), meaning their value increases when the index rises,…
Options trading provides opportunities to hedge risk, maximize returns, and profit from market movements. Unlike stocks, option prices are influenced by multiple factors beyond the underlying asset’s price, such as time decay, volatility, and interest rates. To measure these effects,…
This strategy is designed to identify high-probability reversal points in the market by combining two popular indicators: Bollinger Bands: Measures market volatility and identifies dynamic support and resistance levels. Stochastic Oscillator: Detects overbought and oversold conditions to time reversals. It…
Feature Indicators Oscillators Definition Mathematical tools to analyze trends, momentum, volatility, and volume. Tools that oscillate within a range to detect overbought/oversold conditions. Purpose Confirm trends, measure momentum, and gauge volatility. Identify overbought and oversold conditions, predict reversals. Best for…
Oscillators are a subset of indicators that fluctuate within a fixed range (e.g., 0-100) to identify overbought and oversold conditions. They are especially useful in sideways or ranging markets where trends are unclear. How Oscillators Are Used: Best for range-bound…