Advance Option Trading

Why Institutions Prefer Options
Leverage – Control large positions with small capital

Risk Management – Protect portfolios

Cash Flow – Earn premium income

Volatility Play – Earn from IV rise/fall

Customization – Tailored exposure using exotic options

Core Strategies Used by Institutions

1. Protective Puts
Buy puts to insure large stock holdings against downside risk.

2. Covered Calls
Earn premium income on long-term stock holdings.

3. Calendar Spreads
Take advantage of time decay and volatility differences.

4. Straddles & Strangles
Bet on volatility movement, not direction.

Tools Used by Institutional Option Traders

Bloomberg Terminal – Real-time data, pricing models

Quantitative Models – Black-Scholes, Binomial Trees

Algo Execution – Smart order routing

Risk Management Software – VaR, Greeks analysis

Option Analytics Platforms – Orats, Trade Alert