Part 1 Trading Master Class

Real-World Applications of Options
Hedging

Institutions hedge portfolios using index options. For example, buying Nifty puts to protect against market crash.

Income Generation

Funds sell covered calls or iron condors to earn steady income.

Event-Based Trading

Earnings announcements, policy changes, and global events cause volatility—ideal for straddles or strangles.

Speculation with Leverage

Traders use calls/puts for leveraged bets on short-term moves.

Pros and Cons of Options Trading
Pros

Flexibility in strategy.

Limited risk (for buyers).

High leverage.

Ability to profit in all market conditions.

Cons

Complexity.

Time decay erodes value of options.

Volatility risk.

Unlimited risk (for sellers).