Here are a few key Benefits or Options contracts.
As the name would suggest the Options contract gives the right to option Buyer of exercising his contract if he wishing to in the Spot price doesn’t go in favour of the buyer of the contract he does not have to exercise his right he stands to lose just the premium.
One time premium is the only foo that option buyer has to pay to ride the momentum of underlying price and be a part of the bigger game.
If an option seller is of the opposite view to that of the option buyer he can just sell the option contract and pocket premium income
The options are less risky than equities Say for example if a trader wants to buy 1000 shares of Reliance then at CMP (Rs 1400 per share), one has to shed out Rs. 14,00,000 (fourteen Lakhs) But one can express the same view by buying 2 Call option contracts (500 shares each). Say if he buys at the Money contract of 1410 CE by paying a premium of 35 per lot. Then his total cost would be- (500*35* 2) -Rs 35000 only So, now if option were to expire Out of Money for option buyer, he just stands to lose premium only. But, if the share price of Reliance Industries comes down to Rs 1300, then total loss of equity shareholders will be Rs 1,00,000 (1000100),
Return on investment for an option buyer is very high because the cost paid is just the premium and the potential return is unlimited.
Market investments offer more returns during inflation as compared to other forms of assets. This makes it Possible for The investors to keep up with the lifestyle without cutting down on any expenses even when the prices of goods are gradually increasing Despite greater risks. investors can generate huge profits from the returns The returns earned from the equity market are more as compared to a savings account or a fixed deposit.
Trading options in market can minimize the risks and amplify profits investors with good knowledge and enough research can earn huge profits in the longer runinvestors can generate steady income in the form of dividends Dividends are paid. to shareholders from the profits earned by the company
All Commodity (Buying & Selling)
Trading the most popular commodity, is a wonderful opportunity to make big profits: What is even more interesting about the commodity market is that its extended long-term trends makes it the favourite market for position trading.
All Currency Hedging
Currency hedging is a tool or strategy used in reducing therisks associated with foreign investments People who invest in foreign currencies use this method to shield their money that they have put into the very risky Forex market.
The main advantage of this investment approach is to help reduce, the risks and losses of the investor Hedging is a good strategy when dealing with foreign investment opportunities. The price of currencies are volatile. however, hedging currencies can provide investors with more leverage when they put money in the Forex market.
Mutual Funds
A type of financial vehicle made up of a pool of money collected from many investors to invest in securities like stocks, bonds, money market instruments, and other assets.
All Currency (Buying & Selling)
Exchange-traded currency features are a superior tool for such hedging because of greater transparency, liquidity, counter party guarantee and accessibility Currency trading in India is a significant contributor to the national economy owing to its size. volume and frequency of trading.
Equity Funds
The largest category is that of equity or stock funds.
As the name implies, this sort of fund invests principally in stocks
Fixed Income Funds
A fixed-income mutual fund focuses on investments that pay a set rate of return. such as government bonds, corporate bonds, or other debt instruments.
Income Funds
An international fund (or foreign fund) invests only in assets located outside your home country. Global funds, meanwhile, can invest anywhere around the world. including within your home country. It’s tough to classify these funds as either riskier or safer than domestic investments. but they have tended to be more volatile and have unique country and political risks.
Exchange Traded Funds
A twist on the mutual fund is the exchange traded fund (ETF). These ever more popular investment vehicles pool investments and employ strategies consistent with mutual funds, but they are structured as investment trusts that are traded on stock exchanges and have the added benefits of the features of stocks.
Index Funds
Their investment strategy is based on the belief that it is very hard, and often expensive, to try to beat the market consistently. The index fund manager buys stocks that correspond with a major market index These funds are often designed with cost-sensitive investors in mind.
Money Market Funds
The money market consists of safe (risk-free), short-term debt instruments; mostly government Treasury bills This is a safe place to park your money You won’t get substantial returns, but you won’t have to worry about losing your principal.
Specialty Funds
This classification of mutual funds is more of an all-encompassing category that consists of funds that have proved to be popular. These types of mutual funds for go broad diversification to concentrate on a certain segment of the economy or a targeted strategy.
Balanced Funds
Balanced funds invest in a hybrid of asset classes, whether stocks, bonds. money market instruments, or alternative investments. The objective is to reduce the risk of exposure across asset classes This kind of fund is also known as an asset allocation fund.