INDEX OPTIONS
Buying Index Options (Calls and Puts)
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📈 Index Calls
Profit from a general market rise with limited capital. Significant leverage effect and defined risk (limited to premium paid).
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📉 Index Puts
Portfolio protection or speculation on market decline. Effective hedge against major corrections.
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✨ Advantages of Index Options
- Instant diversification: Exposure to a basket of stocks in a single transaction
- Cash settlement: No stock delivery, simplified administration
- High liquidity: Active markets with tight spreads
- Controlled leverage: Large exposure with limited capital
- Defined risk: Maximum loss limited to premium paid for the buyer