Published on Tuesday, September 4, 2018
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Upstox offers trading services in equity, commodity and currency options. If you have a trading account with Upstox and a demat account with any of the registered depositories in India then you can buy and sell options using the Upstox Pro Web platform.
This article aims to answer frequently asked questions by new Option traders like-
Platforms To Trade Options in Upstox
Upstox offers 2 platforms to buy and sell Options-
Upstox offers a powerful HTML based trading platform called Pro Web. It is different from web-based platforms of other brokers as it looks and works like a full-fledged trading platform. One of the highlights of Upstox Pro Web is it gives you access to Option Chain and to directly trade from the chain. Only a few brokers like Sharekhan offers you the facility to trade from Option Chain.
So here we will understand the process of placing a BUY order in a Call/Put option from the Option Chain. Initially, it may look overwhelming to a new trader, but it is fairly easy and fast.
4 Steps to Place a Buy Order in Options on Upstox Pro Web
Log in to your account
Open the browser on your desktop/laptop and enter www.upstox.com. Hover your mouse on ‘Sign in’ tab placed at the top right side of the screen. A drop-down will appear-
Click on Pro Web. You will be taken to Pro Web page which looks like this-
Click on the ‘SIGN IN’ button available on the top right side of your screen. A login pop up will appear. Enter your login ID/password.
Upstox Pro Web allows you to personalize the screen space as per your trading needs and preferences. Some of the customizations you can do on the screen are-
Add Option Chain in Workspace
To create a new Workspace, click on the ‘+’ button on the bottom of your screen. Enter the name of your new Workspace in the pop screen and press Create.
Now click on the ‘+’ button available at the top of your screen. A drop-down menu will appear. Click on the ‘Option Chain’ tab and the widget will be added to your workspace.
Understanding Option Chain
The Options Chain is highly useful for traders. As said earlier, Upstox Pro Web is one of the few trading platforms that gives you direct access to Options chain and allows you to directly place your orders. You can also get access to Options chain on the NSE website.
An Option Chain is a listing of important data like Open Interest, Volume, Implied Volatility, Ask Price, Ask Quantity etc., of Call and Put Options of a specific underlying and expiry period.
If you are new to Option Chain and want to understand it, you can read our detailed article on ‘How to read Option chain’.
On clicking the ‘Option Chain’ tab, a minimized ‘Option Chain’ screen will appear on your screen. You can maximize it to occupy the entire workspace. A full version will give you a complete view of Option Chain.
Nifty is the default choice for the Option Chain. You can get the Option Chain for your desired instrument by clicking on the ‘NIFTY’ and entering a few characters of the name of the instrument. Likewise, the expiry period of the current month is the default choice which can be changed.
The Option Chain by default shows data on the prices. It also provides you with data on Option Greeks. The greeks help you measure the impact of different risks like interest rate, the value of the underlying, volatility etc., associated with an option. You can learn more about Option Greeks here.
Place a Buy Call/Put option order
To place a BUY order for a Call Option, hover your mouse on the ‘ASK PRICE’ column of the adjacent strike price. Here, to buy a Call Option at a strike price of 9000, We took our mouse to its adjacent ASK PRICE. On hovering the mouse, the price data will flip to a BUY button. Click on the BUY button and an order form will pop up on your screen.
The price is automatically selected based on the real-time market data. You can increase/decrease the price as per your trading strategy. There are a few elements in the order form which you must be aware of-
For the ease of understanding first, understand ORDER TYPE. You have 4 choices here-
COMPLEXITY- You have 4 choices here-
POSITION- You have 2 choices- Delivery and Intraday. If you wish to sell the trade within a day then choose Intraday else to choose Delivery.
TIF- It means Time in Force for orders. You have 2 choices here- Day or IOC (Immediate or Cancel). For every order, you enter a certain price. However, there is a time lag between the placing of an order and its execution. In this time, the price of the Option may change. If you choose ‘Day’ then your order will be active for the day and will be executed when the Option reaches your price. The order will be deactivated at the end in case of non-execution. IOC means Immediate or Cancel. If the Option is not immediately available for your price then the order is canceled.
The order form also allows you to put a STOP LOSS and TARGET PRICE for your order. Stop Loss helps you minimize your losses while Target Price helps you book profits on reaching the target. You don’t have to monitor the market all the time.
Select your choices depending on your strategy. Enter the quantity you want to buy and the price and click on the ‘BUY’ button to place the order. A confirmation screen will pop up. Check and confirm your order. You will get a message on your screen.
Most beginners to Options trading commit a mistake that successful placing of an order means the order is executed. But it doesn’t always happen. Many times, there are no sellers available for the price you quoted and hence the order remains not executed.
To check the status of your order, you need to check the status of your orders in either ‘ORDER BOOK’ or ‘TRADE BOOK’.
The process to place a SELL order for a Call/Put option or to square off the existing trade is similar. There’s only one difference. To place a BUY order for a Call Option, we have hovered our mouse on the ‘ASK PRICE’ column of the adjacent strike price. On hovering the mouse, the price data flipped into a BUY button. To place a SELL order, we need to hover the mouse on the ‘BID PRICE’ column of the strike price. The price data will flip into ‘SELL’ button. Click on the button and an order form will pop on your screen. Next, follow the steps as you have done for placing a BUY order.