Business Wire IndiaOne of the most preferred instruments for trading is ‘Options’ and this can be confirmed by the fact that options have a lion’s share contribution in the total turnover of National Stock Exchange (NSE).
However, trading in options is not a cakewalk for traders as many traders are still see-sawing in controversial debate as to whether ‘options buying’ is more profitable as compared to ‘options selling’ or not.
Common statistic states that nearly 80 per cent of the options expire worthlessly. Thus, it translates to a fact that the buyer of the option loses money while on the other hand, the seller actually takes the premium.
To support this view, the chief economist & derivatives strategist, Dr. John F Summa published a report in 2003. In his study, Dr. Summa shared that on average, 76.5 percent of all the options held till expiration expired worthless.
Then the question arises as to why people are inclined towards buying an option? Usually, traders buy options in anticipation of making an unlimited profit with a limited investment. So, how can one be an option buyer and still make a decent profit? We believe the smartest way to earn a decent amount of money by buying an option is to take advantage of the momentum or trend i.e. when the market is moving in one direction or technically speaking, in a trending market.
Hence, in this product i.e. the 'Pop Scalper', we wait for the market phases of trending move & volatility expansion and recommend accordingly to buy a call or put options in Nifty & Bank Nifty options.