The good thing about options is that you get the loss based on the money, which you have invested before and you get the profit that whatever you will get in the future from that particular lot. In other words in the options the loss of traders is fixed but the profit is unlimited. Options is as same as insurance companies, the working strategy of options is as same as the insurance companies. It means in the options, you have to just give the premium amount of a lot. For example, suppose you buy a lot for six hundred rupees in the options and in future you have become the owner of this lot.
If the lot goes down then you do not have to pay six hundred rupees but you have to pay some percentage of actual amount like fifteen rupees or twenty rupees and if the lot goes up then you will get total profit. In the options the loss of buyer is limited but the profit is unlimited whereas the loss of seller is unlimited that is why the number buyers are higher than the number of sellers. “Options” is highly risky for sellers but less risky for buyers.
Option is totally different from future and cash market because in future and cash, the buyer pays a full amount of lot price but in the options, the buyer pays only premium amount of lot price. For buyers, “options” is a safe game. The expiry date cannot be expanded in options. For example if the date of lot has been fixed in the option then the price of lot will fall gradually and at the end of the fixed date, the lot will have to expired. We can say that the price value of any particular option will decrease automatically according to time.
I hope you must have learnt some important factors about options. One more think which I would like to add here is that whoever wants to start a journey in the field of stock market he must have knowledge about this field so that it may be fruitful for him. One can take help of expert advisors, who provide Stock Option Tips with proper stop loss.