FOR BEST CALLS FOR OPTION CALL & PUT,NIFTY FUTURE OR STOCK FUTURE FILL UP THE FORM GIVEN TO YOUR RIGHT SIDE...>>>>>>>>
With options offering leverage and loss-limiting capabilities, it would seems like day trading options would be a great idea. In reality, however, the day trading option strategy faces a couple of problems.
With options offering leverage and loss-limiting capabilities, it would seems like day trading options would be a great idea. In reality, however, the day trading option strategy faces a couple of problems.
Firstly, the time value component of
the option premium tends to dampen any price movement. For near-the-money
options, while the intrinsic value may go up along with the underlying stock
price, this gain is offset to a certain degree by the loss of time value.
Secondly, due to the reduced
liquidity of the options market, the bid-ask spreads are usually wider than for
stocks, sometimes up to half a point, again cutting into the limited profit of
the typical day trade.
So if you are planning to day trade
options, you must overcome this two problems.