InvestorQ : Do options also work effectively in bearish market conditions?
Aashna Tripathi made post

Do options also work effectively in bearish market conditions?

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Tisha Malhotra answered.
2 years ago
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That is what the beauty of options is all about. Just as you can use options to make the best of bullish market conditions, you can also use options to make the best of bearish market conditions. The beauty of options is that it can help you work markets both ways. Since options are non-linear you can combine options with options and also options with futures to create elegant hybrid strategies to capitalize on bearish opportunities in the market. So if you expect the market to fall, then you do not have to worry about the falling prices. Rather, you can capitalize on the fall by using the power of options. In fact, you have separate choices whether you are moderately bearish or bearish with conviction.

Options can not only be used in isolation they can also be used in combinations with futures and options. Such combinations are called hybrids. Let us try and understand about the use of bearish option strategies; meaning options trading in bear markets. Trading options in bear markets call for a unique set of strategies to be applied to make the best of the situation. Let us look at 4 such bear option trading strategies…

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