Thursday, March 27, 2008

Options Trading - The Trading Ways

The beauty of options trading is the whole array of trades that are made possible by options with varying risk profiles. One more thing I would like to add here is that unless specified I would be refering to equity options. Ofcourse after sometime I would be moving towards options on other asset classes as well. Using options one can get into the directional trades on equity prices, perform volatility trades, trade on skewness and kurtosis. I would be covering each of these class of trades, this would including various trading strategies and arbitrage trades for some. Each trade would include the risk and returns possible. Right now derivatives products are limited in Indian equity markets and those that are available have limited volumes specially in stock puts. However unless you are a very big player the lack of volumes should not bother you. However new products are being introduced now in our markets. This include long term options and the volatility index to come very soon, so things are going to specially become quite interesting.

So I would start with directional trade on equity prices using options the next I write on this topic...............

1 comment:

Stochastic Process said...

Thanks, went through your blog and it is indeed quite informative.... I believe you are into professional trading?