How Options Work in Real Life
Imagine buying insurance:
You pay a premium to the insurance company.
If an accident happens, you claim and get compensated.
If nothing happens, your premium is lost.
Options work the same way:
Premium = Insurance cost.
Strike Price = Insured value.
Expiry Date = Policy end date.
So, options are like insurance policies for traders!
Why Trade Options? (Advantages)
Leverage: Small capital can control a large position.
Flexibility: Profit in bullish, bearish, or sideways markets.
Hedging: Protects portfolio from big losses.
Defined Risk for Buyers: You only lose the premium paid.
Income Generation: Sellers earn premium regularly.
Imagine buying insurance:
You pay a premium to the insurance company.
If an accident happens, you claim and get compensated.
If nothing happens, your premium is lost.
Options work the same way:
Premium = Insurance cost.
Strike Price = Insured value.
Expiry Date = Policy end date.
So, options are like insurance policies for traders!
Why Trade Options? (Advantages)
Leverage: Small capital can control a large position.
Flexibility: Profit in bullish, bearish, or sideways markets.
Hedging: Protects portfolio from big losses.
Defined Risk for Buyers: You only lose the premium paid.
Income Generation: Sellers earn premium regularly.
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
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
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
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.