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What are the benefits of index options

Posted by : Vinay Pale on | Jan 07,2022

What are the benefits of index options

The idea of derivatives trading is to protect portfolios from market risks and gain significant gains from price volatility through nominal margins. Derivatives trading involve buying and selling derivative products. The underlying assets such as stocks, bonds, currencies, and commodities form the basis of these derivatives.


What are the benefits of index options?


A derivatives account needs to be opened with a listed brokerage to trade derivatives directly. Established brokerages such as Angel One are trading and clearing members of NSE and BSE derivatives segments. You can use these members to access the exciting world of derivative market trading. Right now, your equity trading account functions as a futures and options trading account.


To hedge against the market's volatility, you need a derivative trading account if there is substantial exposure to the underlying asset class.


By taking calculated risks with a derivatives trading account, you can afford the margins in futures trading because they are nominal.


The advantage of trading derivatives is that one can hold the position for an extended period (up to three months).


With an Angel One derivatives account, you get these benefits:


1.      Trading from anywhere in India is now possible. Geographical distance is no longer an obstacle to opening an index options account.


1.      Easily accessible by online and offline methods: Your account can be accessed online and offline.


1.      Angel One can send you curated trading tips according to your trading pattern, as well as alerts about new offers and schemes.


1.      Market Insights: Apart from executing trades, brokerage firms also offer the right tools to make informed decisions when selecting products. These tools are based on your financial requirements and relevant market research and analyst inputs.


1.      The Angel, One customer support team provides 24-hour support and a backend interface that allows for 24/7 access to help you navigate the world of derivatives trading.


1.      Fast, easy, and seamless: Opening an Angel One derivatives trading account takes very little time. Furthermore, customers do not need to keep paper receipts for transactions since they can access the report online.


Opening a options trading account


'Client Registration Forms,' along with other SEBI mandated documents, will be needed to know on how to trade in options in india. Regulatory authority for the Indian stock market, SEBI, requires related documents, such as an account opening form and KYC verification proofs.


How do options and futures contracts work?


There are a few differences between futures and options. The primary one is, with options, you are given the right (but not the obligation) to buy or sell something underlying at a predetermined price. The buyer and seller of a futures contract, on the other hand, are obliged to execute the trade at predetermined prices on the date mutually agreed to by both parties.


Trading futures as an example


For example, with your futures account, you purchase one-month equity contracts from ABC Company for Rs.400 per share. If the share price rises to Rs. 450 on the contract expiry date, you get to make a decent profit.