Risk to Reward Ratio is a concept in investing and trading that measures the potential reward for every dollar risked. It’s used to manage potential losses and gains.
For example, if a trader is willing to risk ₹5 to make ₹15, the risk to reward ratio is 1:3, meaning the potential reward is three times the risk. Traders and investors often aim for trades with higher reward ratios to ensure that their potential profits are larger than the possible loss on individual trades.
Moneyness is a vital term in options trading that helps option traders understand the relationship between the price of an
A Call Option is a financial contract in options trading that gives the holder (buyer) the right, but not the
A Put Option is a type of Options contract that gives the holder (buyer) the right, but not the obligation,
In options trading, an Expiration Date refers to the last date that an options contract is valid. On this date,
The strike price, in the context of options trading, refers to the predetermined price at which the holder of an
IS YOUR TRADING TIMEFRAME IN SYNC? This article explores how your chosen trading timeframe significantly impacts your capital gains and
Dive into the world of options trading by understanding the crucial aspects of Intrinsic Value and Time Value in Options. These concepts, when correctly applied, can serve as powerful tools for profitable investments. Our post discusses how to unlock the potentials of these values, offering key insights that seasoned traders use to maximize their portfolio returns.
Rho is an essential concept in options pricing which forms part of the five primary Greek letters used to value
HOW TO TACKLE RISK WITH CONFIDENCE AND A SMILE The risk-reward ratio (R2R) is a key tool for traders evaluating
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