Tata Motors Limited
Éducation

Part 3 Learn Institutional Trading

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Why Trade Options?

Options are popular for several reasons:

Leverage: You can control a large number of shares with a relatively small investment (premium).

Hedging: Protect your portfolio against downside risk using options as insurance.

Income Generation: Selling options can provide regular income (premium received).

Flexibility: Options allow you to profit from upward, downward, or sideways movements.

Risk Management: Losses can be limited to the premium paid.

Types of Options Strategies

Options strategies can be simple or complex, depending on the trader’s goal:

Basic Strategies

Long Call: Buy a call expecting the stock to rise.

Long Put: Buy a put expecting the stock to fall.

Covered Call: Hold the stock and sell a call to earn premium.

Protective Put: Buy a put to protect against downside risk on a stock you own.

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