Best option trading telegram channels in India provide this security where they teach every aspect of option trading in detail.
Therefore, joining the best options trading telegram channel is always recommended in your initial days. Still, preparing a solid plan and strategy is vital before entering option trading.
Extreme price volatility is the primary factor making this trading riskier than stock trading. However, the profit is much higher in options trading.
Depending on the skill, an options trader can get maximum return from a single trade. Still, the risk factor is driven by this method.
So, the question arises - Is Options Trading Worth it?
Let us dig deep and try to find the answer.
Is Option Trading Worth it - 5 Things to Know
Before getting to the points, we suggest joining the best options trading telegram channel for improving your knowledge and staying updated with all the news and updates related to the stock market.
Options trading is risky if you are a beginner, but it has a higher return possibility. Traders can gain 80% of their investment from this trading style.
So, let's get to the five things which explain its worth.
1. Cost Effective Trades
You can use exceptional leverage power in Options trading. This short-term investment is similar to stock trading but has a better cost cut-off.
Indeed, an option trader buys or sells a predetermined price (called premium), which is much cheaper than stock trading.
For example, bank nifty options come with two lots of 25 quantities or shares. On the other hand, the nifty option comes with one lot of 50 quantities or shares.
For example, Nifty runs at 18269; you think the price will go down, so you take the "put option" for 18000 PE. In this case, the premium will be 21.10 Rs. It means you have to invest 1055 for two lots or 50 quantities.
Suppose you take 50 Wipro stock at 389.75, so you have to pay 3897.50 after 5X leverage.
The option price is known as premiums, which are intrinsic and time value. If you want to know more about option premiums, join the Option trading calls telegram channels.
2. Less Risky If You Have Skills
Buying or selling options is risky than holding stocks. Volatility or rapid price movement is the primary reason behind this. Still, most experienced investors use options trading to reduce risk. There is no financial commitment or quantity required to make a profit.
An option trader can spend less amount and share for higher returns. Option traders transfer their risk by applying a hedging method. Generally, it allows investors to simultaneously limit the risk by selling and buying in a single direction.
Besides, there is less investment trade you conduct than equity trade.
For example, you spend 1000 Rs. to buy or sell 2 Nifty lots. On the other hand, your friend spends 10000 Rs. for the same quantity. Both make losses if the direction goes wrong, but you have an extra amount to save and invest in other assets.
We suggest joining India's best options trading telegram channel to learn more about options trading strategy.
3. Highly Profitable
Options trading is highly profitable than equity trading. You don'tdon't even need a calculator to grab almost the same profit from your investment. By buying small premium options, traders can earn 80% of other total investments.
Suppose you buy one lot in bank nifty at a premium of 100 Rs. It means you spend 2500 Rs. for CE or call option. Let's say the option has a delta of 80, so if the price moves up to 90 Rs, your position will gain 80% profit from the investment. 90 Rs. gain on a 100 Rs. investment means you get a 67% return.
But if you trade in stock, the 80% price movement gives you a 10% return which is much lower than option trades. That's why this trading style is much more profitable than others.
However, you can make heavy losses if the price movement goes in the opposite direction. So it is recommended to join the best telegram channel for options trading learning. Here you get every information related to option trading tips and strategies.
4. Offers Multiple Strategy and Investment Alternatives
An option is the most versatile tool in the stock market. Traders get multiple investments and strategic alternatives.
On equity trades, you have two options: hold or sell the stocks. But option trading gives you the flexibility to long, short, hold or multiply your positions. You can take multiple calls or puts with different premiums.
Suppose the nifty runs on 18269, and you predict the market will move down. So you can sell premiums at different prices by taking 18100PE, 18000PE, 17500PE, and others.
The more long positions you take, the premium will decrease. That's how you can make multiple returns from single-direction trades.
Besides, multiple strategies are also available to apply on options like hedging; however, this trading method has more risk and chances to blow out your capital.
You should join the best options trading calls telegram channel to learn more about these strategies.
5. Require less Capital To Make Higher Returns
Depending on the intrinsic and time value, options traders can buy lots at a premium of Rs. 5-500 and more. So you can trade with less capital in options.
However, the returns are lower when you buy or sell premiums at lower rates.
Here come strategies like in-the-money or ITM and out-of-the-money or OTM strategies. These are advanced-level option trading which you can quickly learn by joining the best options trading telegram channels for free.
So these are our points for the question - Is option trading worth it? Remember, option trading has excellent potential for making higher returns. It is only possible when you have the right knowledge and skills.
Traders can start this investment with less capital. But there is a risk of blowing out all your money without learning. So join the best options trading telegram channels, and learn from the experts.