Master Capital

Renko Chart

February 23, 2025 by webmaster@emaster.in

The Renko chart (from the Japanese word "Renga," meaning "brick") was developed by Japanese traders in the 17th century. It focuses only on price movements, forming new "bricks" only when the price moves by a set amount. Unlike traditional charts, time is not considered, making it useful for filtering out minor price changes. Importance Great ... Read more

Kagi Chart

February 23, 2025 by webmaster@emaster.in

The Kagi chart was developed in Japan during the 19th century and introduced to the Western world by Steve Nison, the author of "Japanese Candlestick Charting Techniques." It is a trend-following chart that changes direction based on significant price reversals. A thick line represents a bullish trend, while a thin line represents a bearish trend. ... Read more

Point and Figure (P&F) Chart

February 23, 2025 by webmaster@emaster.in

The Point and Figure (P&F) chart was developed in the late 19th century and refined by Charles Dow, the founder of Dow Theory. Unlike time-based charts, P&F charts focus only on price movements, using X’s to indicate price increases and O’s to indicate price declines. A new column is formed only after a significant price ... Read more

Bar Chart (OHLC Chart)

February 23, 2025 by webmaster@emaster.in

The bar chart (Open-High-Low-Close or OHLC chart) was developed in the early 20th century as an improvement over line charts. Each bar represents four price points: open, high, low, and close. The left tick represents the opening price, and the right tick represents the closing price. This format provides a more detailed view of price ... Read more

Technical Analysis

February 22, 2025 by webmaster@emaster.in

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 on charts, trends, and trading volume to identify patterns that indicate future price movements. Traders ... Read more

Rho (ρ) – Measures Interest Rate Sensitivity

February 21, 2025 by webmaster@emaster.in

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 rates rise. Rho is more relevant for long-term options (LEAPS) and has minimal impact on ... Read more

Vega (ν) – Measures Volatility Sensitivity

February 21, 2025 by webmaster@emaster.in

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. Options tend to become expensive when volatility is high and cheap when volatility is low. ... Read more

Theta (Θ) – Measures Time Decay

February 21, 2025 by webmaster@emaster.in

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 is always negative for buyers, as they lose value over time, while option sellers benefit ... Read more

Gamma (Γ) – Measures Delta Sensitivity

February 21, 2025 by webmaster@emaster.in

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 high Gamma means Delta will change rapidly, making the option more volatile. Gamma is highest ... Read more

Delta (Δ) – Measures Price Sensitivity

February 20, 2025 by webmaster@emaster.in

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, while put options have a negative Delta (-1 to 0), meaning their value increases when ... Read more