Sharekhan Blog

Best Stocks for Options Trading

  • Feb 22, 2024

By buying or selling the right best F&O stocks for intraday at a specific price, investors can take benefit of market fluctuations and generate major returns with time. So, let’s explore the best F&O stocks to buy for options trading: -

What is Options Trading?

It is a type of financial trading that allows passionate investors to purchase or sell the right to buy or sell any of the underlying assets at a specific price at a future date. The main basis of its operation is that the stock buyer has the full right to exercise the contract, but no one can obligate them to do so.

Optio trading offers an opportunity for investors to make profits when the stock price changes without paying the full cost. Mainly, there are two types of options traders should learn. They are the call option and put option.

Benefits of Options Trading

  • Offers higher percentage returns as compared to other forms of trading.
  • Options trading comes with a high potential to offer higher percentage returns as compared to other forms of trading.
  • Options provide investors with high flexibility and complex strategies.
  • Delivers traders with risk-reduction strategies

Best Stocks For Options Trading in India 

1. Reliance Industries Limited

It is headquartered in Mumbai and is one of the prominent players in India, operating in numerous sectors like communications, oil refining, etc. The company was established in the year 1973 and has grown into one of the nation's most valuable companies. However, with a market cap of Rs 16.7 trillion, RIL stock presents several options trading opportunities for investors.

2. State Bank of India or SBI

As the largest public bank in India, State Bank of India offers a variety of financial services such as personal and corporate banking, loans, insurance, and investment management. It's widely traded on both the BSE and NSE, making it a popular choice for options trading because of its high liquidity and volatility.

Furthermore, SBI has a strong history of growth and profitability, boasting a market capitalization exceeding $80 billion as of September 2021. With its extensive branch and ATM network, the bank ensures convenient access to financial services for millions of customers across India.

3. Adani Enterprises

Adani Enterprises operates in a range of sectors like financial services, agribusiness, energy, resources, etc. However, with involvement in coal trading, mining, ports, oil and gas exploration, electricity generation and transmission, gas distribution, and agricultural commodities, the company boasts an integrated infrastructure.

This means that it has established a comprehensive network that covers various aspects of these industries.

4. Infosys Limited

Reputable Indian software development and consulting company Infosys offers a wide range of services, including cloud solutions and digital transformation. Due to its high volatility and liquidity, the stock is actively traded on both the BSE and NSE, which makes it an ideal alternative for options trading for investors.

Not to mention, Infosys has a proven track record of development and profitability—as of September 2021, its market value exceeded $100 billion. With operations in over 50 countries, Infosys is known for its technological prowess and inventiveness.

5. HDFC Bank

One of the largest and most well-known private sector banks in India, this bank provides a variety of financial services to its clientele, including loans, investment management, insurance, and more. Similar to the quartet above of corporations, HDFC Bank's equities are traded on both the NSE and BSE, and it is undeniably well-known for option trading.

This bank has a strong history of growth and profitability over the years, and as of September 2021, its market value was estimated to be approximately $110 billion.

6. Tata Consultancy Services (TCS)

As part of the renowned Tata Group and headquartered in Mumbai, TCS was founded in the year 1968. It is now regarded as one of the best companies internationally for business solutions, consulting, and IT services. TCS is known for its contemporary method of implementing IT and digital technologies throughout different industries.

7. Bajaj Finance

Bajaj Finance, a leading non-banking financial company authorized by the Reserve Bank of India, specializes in consumer finance and wealth management. With a broad spectrum of services ranging from consumer loans to asset management and insurance, it caters to a diverse clientele across retail, SMEs, and commercial sectors, serving both urban and rural India.

Established over 35 years ago, it boasts a customer base of 72.98 million. In 2023, Bajaj Finance reported an impressive annual revenue of ?82,072 Crore, accompanied by a net profit of ?6,417 Crore. This underscores its robust financial performance and widespread market presence.

8. Tata Steel

As everyone knows, TATA and its branches are very large in India. A global leader in the steel industry, Tata Steel is able to manufacture 35 million tonnes of crude steel each year. The company has been modernizing its operations digitally for years, with the goal of being a leader in "Digital Steelmaking" by 2025.

Recently, Tata Steel created history in India by bringing raw materials from Australia via a Capesize bulk carrier propelled by LNG. Tata Steel generated ?59,490 crores in revenue and ?6,122 crores in EBITDA during the first quarter of the fiscal year 2023–24.

9. Bharat Petroleum Corporation Limited (BPCL)

This company holds a prominent position in India's oil and gas sector, with its shares actively traded on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). Known for its strong liquidity and significant volatility, it attracts the attention of options traders. Its robust trading volumes make it a preferred choice for investors looking to engage in options trading.

Its popularity on the stock exchanges highlights its importance in the financial world, appealing to both experienced traders and newcomers. This company's presence underscores its role as a key player in the market, offering opportunities for various trading strategies.

10. Larsen & Toubro Limited (LT)

With its stock being heavily traded on the BSE and NSE, it is the largest engineering and construction company in India. Because of its significant trading volumes and market volatility, this stock is a top pick for options traders due to its exceptional liquidity. Its steady trade activity and dependable market presence are the main causes of its broad popularity.

Because of this, investors looking for stock market chances choose it as their preferred option.

The Bottom Line

Options investing is an amazing method of enhancing your portfolio and making massive profits if done right with a full understanding of the risks provided. So before buy any of the stocks, consider them in terms of liquidity, volatility and upcoming events. On top of that, research well and be deliberate before investing in options trading among the top 10 stocks for options trading in India.


Team Sharekhan
by Team Sharekhan

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