Directional Strategies: Long Call & Long Put
The simplest form of option trading. Buying a lottery ticket with a known probability.
Long Call (Bullish)
You buy a Call Option (CE) when you expect the market to go UP significantly.
- Max Loss: Premium Paid.
- Max Profit: Unlimited.
- When to use: Strong Breakout, High Momentum, Low IV (Cheap premiums).
Long Put (Bearish)
You buy a Put Option (PE) when you expect the market to go DOWN significantly.
- Max Loss: Premium Paid.
- Max Profit: Unlimited (until stock hits zero).
- When to use: Breakdown, Panic selling, Bad news.
Strategy Rules
The 30-Minute Rule
If the trade does not move in your favor within 30 minutes, EXIT.
Why? Because Theta Decay will start eating your premium. Option buying is for Momentum only,
not for holding/hoping.
*Disclaimer: NSE/BSE frequently revise Lot Sizes and Expiry Days (e.g., SEBI Circulars 2024/2025). Always check the latest circular on nseindia.com before trading.
Standard Disclosure: Investment in securities market are subject to market risks. Read all the related documents carefully before investing. The content provided here is for educational purposes only and does not constitute financial or investment advice. AlgoStraddle Academy is not a SEBI registered investment advisor. Trading options involves high risk and capital can be lost.