Option Trading

Option Trading involves buying and selling contracts that give you the right, but not the obligation, to buy (call option) or sell (put option) an underlying asset (like a stock or index) at a fixed price within a specific time period.

Options are powerful tools used for:

Speculation – to profit from price movements

Hedging – to protect existing investments

Income generation – by selling options and collecting premiums

Option buyers risk only the premium they pay, while option sellers can earn consistent income but take on more risk. Traders use strategies like straddles, spreads, and covered calls based on their market view and risk appetite.

Option trading is popular in NIFTY, BANKNIFTY, stocks, and is widely used by both retail and institutional traders due to its flexibility, leverage, and risk control.