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What are the benefits of options trading?

These are the benefits that options trading offers:

  • They can be used for hedging your position against any market downturn without selling stocks from your portfolio.
  • Options provide high leverage so you can benefit from market movement.
  • Charges and taxes are minimal in options trading compared to futures and cash segments.
  • You can take a big position with limited capital.
  • They can also be used for generating fixed income by writing covered calls or selling cash-secured puts against your holdings
  • Multiple strategies which can be used for bullish, bearish, neutral and rangebound conditions can be developed using options.