Can I start option trading with 1000 rupees? If you also want to start options trading but don’t have that much money and want to start option trading with a small amount of capital, say 1000 rupees or less,. Then, in the upcoming article, I will tell you how to start option trading with 1000 rupees or less. So that you can also start your trading journey.
Can I trade with 1000 rupees in option trading?
If I say it in one word, can we start option trading with 1000 rupees? The answer is simple: “Yes.” You can start option trading with 1000 rupees and even below 1000 rupees, but the point is, you have to know the ins and outs of option trading because option trading is a very risky instrument. As a beginner, you have to learn all the basics of option trading so that you do not lose much in this market.
How much money is required to begin option trading?
Options trading is a derivative part of the stock market. The price of the options depends on the underlying assets of the share market, which means stocks. Options trading is a very attractive part of trading because of its volatility. In option trading, you can generate a good return in one day, but remember that with a positive side also comes a negative side. Every coin has two sides, and the other side of the coin is that with a high return, you get a high quality of risk.
The option is just like a token amount of money that you pay, and in return, you get an agreement to buy that asset at a future date. But keep in mind that you are not bound to buy that asset at a future date if you don’t want to.[can I start option trading with 1000 rupees]
As budding traders, we have to work with small capital so that we learn first in our initial stages and then increase our capital later on. Now I will discuss how to start option trading with little capital.
Beware of these rules before beginning option trading with small capital
Rule: Understand the options market before you enter it.
The options market is just different from the cash market, where in the cash market we used to sell or buy stocks on the current date. In an option market that is derived from a stock market, the premium of the options is decided at a future date. We are just predicting the future.
If you are buying an option, then there must be someone who is selling it. We are buying options because we think we are going to make a profit. On the other side, the person who is selling an option is also thinking that he is going to make some profit, but the hard truth is that only one of you will make some profit, as option trading is a zero-sum game.
So try to understand the options market first and plan your trade according to it so that you generate a good profit from this market.
Rule: Start With Small Capital
Even though you have a lot of capital, I will advise you never to start with a lot of capital because a lot of capital leads to big losses. When you are in the initial stages, always start with a small amount of capital.
To start, you must use 10% of your capital if you have a good chunk of capital in your pocket.[can I start option trading with 1000 rupees]
Example: If you have 5 lakh rupees as trading capital, I will suggest you don’t use the whole 5 lakh in the beginning stage. You just use the 10%, which is 50,000, for trading and start learning and rectifying your mistakes in your trade. When you grow with profits and also with trading skills, you can increase your capital accordingly.
Rule: Define Your Holding Period
The holding period is essential in option trading as it determines whether you are going to generate profit or loss in the trade. When holding periods become too long, it leads to a losing trade as the option has a limited period.
So try to participate in the quick movement of the price so that you can generate a good profit in your options trading.
Rule: Set The Stop Loss And Target Price
Many tools in the market help you know how much loss you will face when the market goes to a certain point against you. So decide your stop loss according to it.
Also, determine your target before taking the trade. Determining your target helps you maximize your profit, stay on the trade, and not get out as soon as the market favours you.
Rule: Do Not Do Impulsive Buying And Avoid Tips
Never do impulsive buying based on the news or some other reason. Note: Always wait for your setup and trade according to it.
Do not run for tips in option trading because we don’t know where these tips are coming from, especially in the telegram channels. Always do your research before taking any trade.
Rule: Avoid The Unknown Events
Unknown events are one of the many factors that affect the stock price. These events can be budgets, quarterly results, and many more.
As a result, there are lots of movements in the price that affect the price of the options, so it is better to be advised not to enter into option trading when there are some unknown events. Just avoid trading during the events.[can I start option trading with 1000 rupees]
Now plan your trade when such events pass and trade according to your setup.
Conclusion: Can I start option trading with 1000 rupees?
Now you can start with a small amount of capital by using these rules. We can take a small amount of capital so that we can learn more and more from our mistakes, and it is better to make all the mistakes with low capital, as with low capital losses will also be small. We also learned to enhance our profit with low capital and increase our capital gradually according to our trading skills.
Read also: Income Revealed: How Much Money Can You Make in Options Trading?
Read also: Trade like a pro: Option trading books for beginners you must read.
Read also: Original Data Leaked: What percentage of option traders make money?
I’m a seasoned trader with over 3 years of experience in financial markets. Throughout my journey, I’ve navigated various market conditions and developed my skills in trading strategies, risk management, and market analysis. Now I am also developing myself as a good digital marketer.