Part 2 Intraday Trading Master Class

Why Do People Trade Options?

Option trading is popular for four major reasons:

1. Hedging

Investors use options to protect their portfolio against downside risk.
Example: Buying a put acts like insurance against a crash.

2. Leverage

Options allow you to control large positions with small capital.
A ₹1 lakh equity position may require only ₹2,000–₹5,000 in option premiums.

3. Income Generation

Option sellers earn premium income in range-bound markets.

4. Speculation

Traders profit from directional moves (up or down), volatility changes, or time decay.