An option is said to
be a contract, which gives the buyer the right, but not the obligation, to buy
or sell specified quantity of the underlying assets(these are financial
instruments such as stock, futures, commodity(wheat/rice/cotton/gold/silver/bonds
etc) at a specific (strike) price on or before expiry date.
The underlying may
be commodities like wheat/ rice/ cotton/ gold/ oil or financial instruments
like equity stocks/ stock index/ bonds etc.
In option trading,
the buying and selling is done at premium price. And this is also called as
safe trading because a trader is trading in option. And the capital which is
invested in the option trading is comparatively at low risk with respect to
capital which is invested in equity cash and commodity. This means a trader can
start trading with a small amount and with low risk in the option segment of
share market.
Two types of
strategy is followed in option trading:
1.Call:- A stock option
provider gives Buy Call option tip to a trader to buy call option when there is
a bullish mode of the market.
2.Put:- A stock tips provider gives Buy
Put option tip to a trader to buy Put option when there is a bearish mode of
the market.
A stock market depends on sentiments such as any
awaited news or merging of companies or any type of news. A researches utilizes
the fundamental, technical and sentiments of the market to provide 85-90%
accuracy in the calls which they provide to the traders. Hence it is
recommended to take advise from share market experts to earn a very good
profit. Because option trading is that segment in share market in which a
trader can earn a very good profit by using 90-95% accurate stock option tips.
Along with this a trader is also recommended to play safe in this market to
minimize risk and earn high returns.
Option trading works on 2 strategies when the market is on bullish mode, buying calls are given when the buyer is on a bearish mode and a call is given.Gold and silver tips
ReplyDelete