InvestorQ : How can I as a trader use options on the long side and on the short side?
Rutuja Nigam made post

How can I as a trader use options on the long side and on the short side?

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Arti Chavan answered.
2 years ago
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The beauty of the options market is that you can play the market both ways. Normally, even when the markets are lacklustre, it is the index and the frontline stocks that are lacklustre. The sub-plots and the sub-themes in the market are still at play. During the 2012 period when the markets were largely lacklustre, you had sectors like consumer goods and pharma that were outperforming while capital goods and banks underperformed. In 2016, the situation was reversed when pharma and IT were underperforming while metals and downstream oil were outperforming. The idea behind a long/short strategy is to play such specific themes; one on the long side and one on the short side. Of course, these are not risk free but by being as close to the momentum as possible you are not just betting on individual performance but on relative outperformance. You can both buy and sell futures or you can buy call and put options to execute this long/short strategy!

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