InvestorQ : Options look quite simple; is that a correct assumption?
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sara Kunju made post

Options look quite simple; is that a correct assumption?

Answer
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2 years ago


Futures and options are conceptually different but intrinsically they are the same as they try to profit from a stock or an index without investing the full sum! Don’t be carried away by the simplicity of options because the real challenge comes when you have to combine options and payoffs to create hybrid strategies. Option as a product concept may appear to be quite simple but option trading and option strategies are a lot more complex. Let us first understand what are options and then move on to what is options trading and to options strategy. Options trading and options strategy are 2 different things altogether. Option trading refers to plain buying and selling of options in the equity derivatives market. Options strategy involves a combination of options with options and options with futures in such a way that you can regulate risk and returns much better.