Options Trading Strategies Observed

Futures and Options are two commonly heard derivatives in the stock markets operating in the country.  Option is the trading contract whereby two seller and buyer decide to exchange the “underlying asset” with a fixed predetermined price value on or before the expiry of the contract. Option trading strategies observed in India does not favor the seller of the underlying asset involved in such contract very positively. Very limited choices are available to the seller and generally enjoy less flexibility with his or her choices and profit earning scopes. The buyer is actually at an advantageous position and enjoys huge freedom.  An option in trading market can be Call option or Put option. 

Call options allows the buyer to buy an asset or product at a given price whereas on the other hand the Put option permits the buyer to buy the product at the strike price. Under Put Options the buyer has the right to sell and the seller has the right to buy assets. If the buyer wants to buy the asset the seller has to sell it and if the buyer wants to sell the asset then also the seller has no other option but to surrender to the will of the buyer. In both cases the sellers have very limited scope to earn for him. In options trading one needs to have very minimum deposit to trade unlike other trading. The buyer is required or has the right to exercise the option but he is free to decide if he would or would not as this is not mandatory on him.