What are the advantages of option trading ?
Options trading has seen significant growth in recent years due to the many benefits it offers,
- Lower Investment:Options are more cost-effective than buying stocks directly. Options allow you to trade the stock and make a profit, but you must pay the full stock price to do so.
- acts as insurance:Options function like Insurance if you own a stock over a long period. Let's say you own 100 shares of ABC Limited. To protect yourself from any price declines, you can sell a Call Option during the period.
- Higher Profit percentage: Although you invest less in Options, your profit percentage due to movements in the price of the underpinning is the same as investing in stocks.
- You may profit in any market scenario:With Options you can make a profit regardless of whether the market is bullish, bearish, or neutral. Option strategies can be executed according to market conditions and you may make a profit.
