Why Traders Use Options
Options are not just for speculation—they serve many purposes:
🎯 Speculation
Traders can take directional bets with limited capital.
🛡️ Hedging
Protect your portfolio or a specific stock against adverse movements.
💰 Income Generation
By selling options (covered calls or puts), you can earn premium income.
🎯 Leverage
Control larger exposure with less capital, but with higher risk.
Real-World Example: Call Option
Imagine Reliance stock is at ₹2500.
You buy a Call Option with strike ₹2600, premium ₹50, expiry in 2 weeks.
Scenario A – Price goes to ₹2700:
Profit = (2700 – 2600 – 50) = ₹50 profit per share
ROI = ₹50 / ₹50 = 100%
Scenario B – Price remains ₹2500:
Loss = Full premium = ₹50 (option expires worthless)
Options are not just for speculation—they serve many purposes:
🎯 Speculation
Traders can take directional bets with limited capital.
🛡️ Hedging
Protect your portfolio or a specific stock against adverse movements.
💰 Income Generation
By selling options (covered calls or puts), you can earn premium income.
🎯 Leverage
Control larger exposure with less capital, but with higher risk.
Real-World Example: Call Option
Imagine Reliance stock is at ₹2500.
You buy a Call Option with strike ₹2600, premium ₹50, expiry in 2 weeks.
Scenario A – Price goes to ₹2700:
Profit = (2700 – 2600 – 50) = ₹50 profit per share
ROI = ₹50 / ₹50 = 100%
Scenario B – Price remains ₹2500:
Loss = Full premium = ₹50 (option expires worthless)
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Details:
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Feel free to ask any questions. I'm here to help!
Details:
Contact : +91 7678446896
Email: skytradingmod@gmail.com
WhatsApp: wa.me/7678446896
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Hello Everyone! 👋
Feel free to ask any questions. I'm here to help!
Details:
Contact : +91 7678446896
Email: skytradingmod@gmail.com
WhatsApp: wa.me/7678446896
Feel free to ask any questions. I'm here to help!
Details:
Contact : +91 7678446896
Email: skytradingmod@gmail.com
WhatsApp: wa.me/7678446896
関連の投稿
免責事項
これらの情報および投稿は、TradingViewが提供または保証する金融、投資、取引、またはその他の種類のアドバイスや推奨を意図したものではなく、またそのようなものでもありません。詳しくは利用規約をご覧ください。