Options trading has been gaining popularity among equity trading investors in recent years. However, options trading is considered complex and risky, especially for amateurs and beginners.
Here is your helpful guide to options trading for you.
What is Options Trading?
Options trading is the trading of instruments like stocks, commodities, index, forex, and exchange-traded funds (ETFs) at a specific price within a particular date. It gives you a right to buy or sell at that price before the expiry of the options contract. However, there is no obligation to buy or sell – it is just the right you hold or exercise
You can do options trading in the Indian as well as US stock market. There are four standard terms you should know in options trading for clarity:
The buyer of the option has Limited Risk and Unlimited Profit.
The seller of the option has Limited Profit and Unlimited Risk.