Part 2 Support and Resistence

Risk Management in Options for Beginners

Options are risky if not handled well. Here’s how beginners can manage risks:

Never trade with all capital – Use only 10-20% of portfolio in options.

Set stop-loss – Don’t let losses grow.

Choose liquid contracts – Always trade in Nifty, Bank Nifty, or large-cap stocks with high liquidity.

Understand time decay (Theta) – Options lose value as expiry approaches.

Avoid shorting naked options – Unlimited risk for beginners.

Common Mistakes Beginners Make

Buying out-of-the-money options hoping for jackpot.

Ignoring Greeks (Delta, Theta, Vega).

Overtrading with small capital.

Trading without a strategy.

Not exiting on time.

Tips for Beginners to Succeed

Start with paper trading before real money.

Focus on 1-2 simple strategies (covered call, spreads).

Learn technical + fundamental analysis.

Be disciplined—don’t chase quick money.

Track and review trades weekly.