InvestorQ : I understand trading long and short. How do I trade listless markets?
manisha Kolvenkar made post

I understand trading long and short. How do I trade listless markets?

Answer
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Ria Jain answered.
2 years ago


As a trader in the stock market you are not just limited by equity products but also have access to futures and options. The advantage here is that you can use limited risk approach of buying options when the market is too volatile. Similarly, if you want to take a view on volatile markets without worrying about direction then you have strangles and straddles that can help you do the job. Also if you are expecting a range bound trading then there are opportunities in the form of spreads where you can trade for limited profit and limited risk. The idea of trading is all about using your capital innovatively to make the best of the prevailing circumstances. The use of futures permits you to trade the markets both ways in a leveraged manner and so you are indifferent to the direction of the market as long as you are able to catch the underlying trend perfectly. In fact, even in dull markets there are option selling strategies that you can deploy that can help you to earn steady returns with limited risk. The moral of the story is to keep churning your money and putting it to work. Instead of trying to predict what will happen to the market just look at what is happening in the market and play along.