Trading of Futures and Options (F&O) has boomed in India at a swift pace. When it comes to building and testing options strategies, beginners get confused and often search for the best app for a first-time F&O trader. In this blog, we list platforms that are worth considering if you are searching for the best trading app.
5 Platforms for Strategy Building and Testing in F&O
These platforms offer useful tools for building, analysing, and testing F&O strategies before placing trades:
1. Dhan Options Trader
The Dhan Options Trader is specifically developed for options strategies. It comes with features like a strategy builder, live option chain, Greeks and margin calculator on one page. It allows traders to create a multi-leg strategy and see its payoff on charts in real-time, making it one of the best apps for options strategies.
2. Zerodha Kite
It is one of the most popular trading apps in India and provides traders with easy-to-use options strategy building and backtesting tools with the help of Sensibull, which is a Linked Tool. Other key features are Basket orders and a simplified UI for trading.
3. Upstox Pro
It offers an advanced options chain, margin calculator and a basic charting tool that will benefit F&O traders. Fast order execution and low brokerage fees are also among its strengths.
4. Angel One
The app provides an options strategy builder called ARQ Prime, along with live Greeks and payoff graphs. It also offers extensive research reports.
5. ICICI Direct
The platform features an options strategy tool that provides margin estimation, options chain analysis and integrated research from ICICI Securities.
Key Features for selecting the Right Platform
Not all trading apps are the same, and here are a few important features that are worth checking.
1. Strategy Builder Tools
These are essentially used for building multiple option legs that are useful in testing different strategies. Traders can analyse strategies like straddles, spreads, and iron condors before taking risk with their real capital and thus are of great importance in reducing guesswork.
2. Display of Options Chain and Greeks
Options chain displays the strike price, premium and open interest. It is available on a single page with Greek parameters such as delta and theta so that the trader can analyse and understand the risk involved in taking an options position in the market. These indicators cannot be ignored when making F&O decisions.
3. Simulation (Paper Trading) mode
Simulation is a way to train in trading that helps traders to develop a strategy using virtual money before they risk actual money. Many beginner traders tend to skip the training mode; however, it is useful and has the potential to save them from a lot of loss.
4. Margin Calculator
Margin is the amount that a trader needs to hold in his account while placing an order. F&O trading involves the use of margin money, and the margin calculator will estimate the required margin while applying any strategy.
How to Test Options Strategy Before Placing a Live Trade?
Testing of an options strategy is one of the most significant tasks that are avoided by beginner traders. Follow this simple strategy to be on the safer side:
Step 1
Check how your strategy would have performed in past market conditions. This may give some basic idea of its behaviour but is not the actual indicator of the real-time market and does not give a guarantee of what is to come in the future.
Step 2
Place the same trade with the help of virtual money in the paper trading mode and see how profit and loss change according to the movement of the market.
Step 3
After testing the same in simulation mode and feeling confident about its capabilities, take live trades with only a small portion of your capital. You will get a fair idea as the real market is involved in this situation, and it is good to invest a small portion of your capital for now. Gradually increase the portion with gain of experience.
As reported by SEBI, a large number of individual traders in F&O square up with losses. Therefore, using the best app for options strategies and conducting thorough research can support more informed trading decisions.
Choose the Right F&O Platform to Test Your Strategy First
The selection of the right platform will require some research, but focusing on strategy building, margin calculators and paper trading facility will help in being knowledgeable about a strategy before entering the market with real money, thereby increasing confidence and avoiding unnecessary financial loss.
By Amey Myers
