10 Points to Consider Before You Trade in Options

10 POINTS TOCONSIDERBEFORE YOUTRADEIN OPTIONS

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Ingeneral,optionstradingcomprises purchasingordisposingofanunderlyingasset atapre-setorpre-negotiatedpricebyagiven futuredate.ByselectingBigul,India'stopoptions tradingplatform,youmayquicklysucceedor makemoney.

Ingeneral,optionstradingcomprises purchasingordisposingofanunderlyingasset atapre-setorpre-negotiatedpricebyagiven futuredate.

Let'stalkabout10thingsyouabsolutelyneedto knowbeforetradingoptions. bigul.co

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1.

VARIETY OF MATURITIES

Themainthingaboutoptionsis thattheycomeinavarietyof maturities. bigul.co

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CALL AND PUT OPTIONS

Withcall-and-putoptions,youhavethe abilitytobuyandselloptions, respectively.

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3.

UPFRONT PREMIUM MARGIN

You’reonlyexpectedtopaythepremium marginupfrontinitiallybecausethe premiumyoupaidforacallorputoption essentiallybecomesyourmaximumloss

4.

TRADE-OFF FOR SHORTER MATURITY

Eachoptionacquisitionandthe entireprocessinvolvesatrade-off

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5.

INFLUENCE OF VOLATILITY

Volatilityisthemostimportant elementthatinfluencesandpushes thevalueofanoption.

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STT ADVANTAGE 6.

Amongtheprimaryadvantagesof usingoptionsinIndiaisthatthe SecuritiesTransactionTax(STT)is calculatedonthepremiumvalue comparedtothenotionalvalueof theoption.

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7.

STOCK AND TIME VALUE

Keepinmindthattheoptionprice foraspecificstrikeonastock includestwoparts:thevalueofthe stockitselfandthetimevalue.

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IMMEDIATE AND INTRINSIC VALUE

Understandingimmediatevalueand intrinsicvalueiscrucialfor successfullytradingoptionsin today’stime.

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9.

VERSATILE OPTIONS

Optionsareextremelyversatileand dynamicgoodswhichmakesthem quiteinterestingandveryeasytobe utilizedwheneverneeded. bigul.co

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SECURE PLATFORM

Thelastbutextremelyimportantpoint torememberhereisthatoptionscan bebundledtoaccommodateavariety ofmarketcircumstancesthatcanbe favourableandunfavourableattimes

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