Gamma Blast | 10x profit on option expiry ! - Learn to capture

Pravin Khetan

8 Mar 202418:25

Summary

TLDRThe video script, presumably in Hindi, discusses strategies for capturing 'gamma blasts' in the stock market, which are sudden increases in the value of options premiums. The speaker, Praveen Khetan, explains the concept of delta and gamma in options trading and how they change with the price of the underlying asset. He introduces a simple indicator, the 'William's Percent Range,' to predict and capitalize on these market movements. The script also promotes a brokerage platform, M Stock, for its zero brokerage offers and features, encouraging viewers to open an account for better trading experience.

Takeaways

😀 The speaker, Praveen Khetan, is discussing the concept of 'Gamma Blast' in the context of stock market trading, specifically options trading.
📈 The script talks about a personal experience where an investment of ₹1 grew to around 50, indicating a significant profit from a 'Gamma Blast'.
📊 'Gamma' is explained as the rate of change of the option's delta with respect to changes in the price of the underlying asset.
💡 The importance of understanding 'Delta' and 'Gamma' is emphasized for capturing profits during a 'Gamma Blast'.
📚 'Delta' is described as the change in the option's premium relative to a change in the price of the underlying asset.
🔍 The script explains that as the price of the underlying asset changes, both 'Delta' and 'Gamma' will also change, affecting the option's premium.
📉 'Gamma' is said to decrease as the price of the underlying asset moves away from the strike price, whether it increases or decreases.
🚀 The concept of 'Gamma Blast' is related to the exponential relationship between 'Gamma' and time, especially as expiration approaches.
👀 The speaker suggests using a technical indicator, possibly the 'William's %R', to capture 'Gamma Blast' opportunities in the market.
💻 The use of a fast, leading indicator is recommended for timely entry into trades during a 'Gamma Blast'.
📝 The script mentions a broker named 'M Stock India' that offers zero brokerage on all segments, which can be beneficial for traders to save costs.

Q & A

What is the main topic discussed in the video script?
-The main topic discussed in the video script is the concept of 'Gamma Blast' in the context of options trading, and how to capture profits from it using a simple indicator.
What is a 'Gamma Blast' in trading?
-A 'Gamma Blast' refers to a rapid increase in the price of an option due to a significant movement in the underlying asset's price, leading to a surge in the option's delta and premium.
What is the role of 'Delta' in options trading as explained in the script?
-In options trading, 'Delta' represents the rate of change of the option's premium with respect to changes in the underlying asset's price. It indicates how much the option's premium will change for a given change in the underlying asset's price.
What is 'Gamma' and how does it affect options trading?
-'Gamma' is a second-order derivative that measures the rate of change of 'Delta' with respect to changes in the underlying asset's price. It affects options trading by indicating how much 'Delta' will change as the price of the underlying asset changes.
How does 'Gamma' behave as the price of the underlying asset changes?
-As the price of the underlying asset increases or decreases, 'Gamma' typically decreases, meaning that the rate of change of 'Delta' with respect to the price of the underlying asset slows down.
What is the significance of the 'zero brokerage' concept mentioned in the script?
-The 'zero brokerage' concept refers to a brokerage model where traders are not charged any commission for trading activities. This can help traders save on costs and potentially increase their profits.
What is the importance of using a fast leading indicator in trading as suggested in the script?
-A fast leading indicator can provide early signals of potential market movements, allowing traders to make quick decisions and potentially capture profits before the market moves in a particular direction.
What is the 'William's %R' indicator and how is it used in the script?
-The 'William's %R' indicator is a momentum indicator that measures overbought and oversold conditions in the market. In the script, it is used as a fast leading indicator to provide entry signals for trading.
What is the strategy for capturing profits from a 'Gamma Blast' as described in the script?
-The strategy involves using a fast leading indicator like 'William's %R' to identify entry points during a 'Gamma Blast'. The script suggests waiting for the indicator to break above 80 to exit a trade, and using the next candle for the trade entry.
What is the role of 'MSI' in the context of the script?
-In the script, 'MSI' likely refers to 'Money Supply Index' or a similar financial tool that investors can use to gauge the potential for market movements and make informed trading decisions.
How does the script suggest traders can improve their chances of successful trades during 'Gamma Blasts'?
-The script suggests using a combination of understanding 'Gamma Blasts', using a fast leading indicator for entry signals, and adjusting the probability of trades to increase the chances of successful trades during 'Gamma Blasts'.

Outlines

00:00

📈 Understanding Gamma Blast in Option Trading

The speaker, Praveen Khetan, introduces the topic of 'Gamma Blast' in the context of option trading. He discusses the concept of 'Delta', which measures the change in an option's premium with respect to changes in the underlying asset's price. 'Gamma' is also introduced as the rate of change of Delta itself with respect to the underlying asset's price. The speaker explains how Delta and Gamma affect option premiums and how they can be used to capture significant profits during market movements. The importance of understanding these concepts for traders is emphasized, along with a teaser of a simple indicator to capture such market opportunities.

05:02

💼 Benefits of Zero Brokerage Trading with M Stock

The script shifts focus to the advantages of zero brokerage trading offered by M Stock, an Indian brokerage platform. It highlights how M Stock has saved clients significant amounts of money by offering true zero brokerage on trades. The platform's features, such as a large trading facility, low-interest rates, and no hidden charges, are detailed. The speaker also mentions the ease of trading with M Stock, including one-click trading features and voice search capabilities. The goal is to encourage listeners to consider M Stock for their trading needs, emphasizing cost savings and user-friendly features.

10:03

📊 Analyzing Gamma Blast with M Stock Account

The speaker provides a practical example of capturing a 'Gamma Blast' using an M Stock account. He walks through the process of opening an M Stock account, searching for the Nifty index, and selecting the appropriate options chain for a specific expiration date. The focus is on the rapid increase in option premiums during a 'Gamma Blast' and how to identify and capitalize on such opportunities. The importance of using fast and leading technical indicators to get signals for trading is stressed, with an example of how a price movement can significantly impact option premiums in a short period.

15:05

📉 Implementing the William's Percent Range Indicator

The final paragraph introduces the William's Percent Range (WPR) indicator as a tool for capturing 'Gamma Blasts'. The speaker explains how the WPR can provide entry signals for trades and emphasizes its simplicity and effectiveness. He advises on the settings to use for the WPR and how to interpret its signals in conjunction with other technical analysis. The script concludes with an invitation for viewers to test the strategy on their own, share their experiences, and subscribe to the channel for more informative content on option trading strategies.

Mindmap

Keywords

💡Gamma Blast

Gamma Blast refers to a significant increase in the value of options premiums due to changes in the underlying asset's price, particularly as expiration approaches. In the script, the concept is used to describe a scenario where the price of an option jumps dramatically within a short period, leading to substantial profits for traders who have correctly anticipated this move.

💡Delta

Delta measures the sensitivity of an option's price to a $1 change in the price of the underlying asset. It is a key concept in options trading, as it helps traders understand how much the option's premium will change with the underlying asset's price movement. In the video, delta is discussed in the context of how it affects the premium of an option as the underlying index, such as the Nifty, changes.

💡Gamma

Gamma is the rate of change of delta with respect to the underlying asset's price. It indicates how much the delta of an option will change with a small change in the price of the underlying asset. The script explains gamma in the context of how it can lead to a 'gamma blast,' where the delta changes rapidly, affecting the option's premium significantly.

💡Expiration

Expiration refers to the date on which an option contract becomes invalid if it has not been exercised. The script discusses the impact of expiration on options trading, particularly how the gamma and delta values of options can change dramatically as the expiration date approaches, leading to potential gamma blasts.

💡Strike Price

The strike price, also known as the exercise price, is the price at which the holder of an option can buy or sell the underlying asset. In the script, the strike price is used to illustrate the potential for profit when the underlying asset's price moves in a favorable direction, causing the option's premium to increase.

💡Premium

Premium in the context of options trading refers to the price paid to purchase an option contract. The script discusses how the premium of an option can increase significantly during a gamma blast, leading to substantial profits for the option holder.

💡Moving Average

A moving average is a technical analysis tool that helps smooth out price data by creating a constantly updated average price. In the script, moving averages are mentioned as part of the technical indicators that traders might use to identify potential trading opportunities.

💡MSI (Market Sentiment Index)

Market Sentiment Index, or MSI, is an indicator that gauges overall market sentiment, which can influence trading decisions. Although not explicitly defined in the script, the concept is implied when discussing how traders perceive certain market movements as either favorable or not.

💡Zero Brokerage

Zero brokerage refers to a business model where a broker does not charge a commission for executing trades. The script mentions a broker that offers zero brokerage, which can be beneficial for traders looking to minimize their trading costs.

💡Intraday

Intraday trading is the practice of buying and selling securities within the same trading day. The script discusses how traders can apply the concept of a gamma blast to intraday trading strategies.

💡Technical Indicator

A technical indicator is a statistical tool used by traders to identify trading opportunities and potential price trends. The script mentions using a 'very simple indicator' to capture gamma blasts, emphasizing the importance of technical analysis in options trading.

Highlights

Introduction to the concept of 'Gamma Blast' in trading and how to capture it using a simple indicator.

Discussion on the experience of a 'Gamma Blast' where the investment increased threefold from ₹1 to nearly 50.

Explanation of the premium increase to ₹440, resulting in a 20x profit, and how to capture such opportunities.

Understanding the concept of 'Gamma Blast' and its importance in options trading.

Definition and explanation of 'Delta' in the context of price changes and its impact on option premiums.

The relationship between 'Gamma' and 'Delta', and how changes in price affect both.

How 'Gamma' decreases as the price moves away from the strike price, both in increases and decreases.

The maximum 'Gamma' is found at-the-money and how it indicates the change in 'Delta'.

The exponential relationship between 'Gamma' and time to expiration and its impact on trading strategies.

The importance of having a broker with zero brokerage for trading options to save on costs.

Introduction of 'M Stock India' as a broker with zero brokerage and its benefits for traders.

How 'M Stock India' saved 145 crores in brokerage for its clients and offers a wide range of trading facilities.

The simplicity of trading options with 'M Stock India' and its user-friendly platform features.

The company's background, being a well-established investment bank with over 170 billion dollars in assets.

How to open a trading account with 'M Stock India' and the benefits of doing so, including tax and interest savings.

The use of technical indicators like 'William's Percent Range' for capturing 'Gamma Blast' opportunities.

Demonstration of how 'Gamma' and 'Delta' behave during an 'expiry day' and the resulting impact on option premiums.

A step-by-step guide on using 'M Stock India' platform to trade options effectively.

The significance of 'Gamma Blast' on the day of expiry and how it can lead to substantial profits.

How to use the 'M Stock India' platform to select options, strikes, and execute trades with ease.

The importance of market timing and the role of 'Gamma' in capturing rapid price movements.

A real-life example of a 'Gamma Blast' event and how it was captured for profit using the discussed strategy.

Encouragement to subscribe to the channel for more informative content on option strategies and trading.