In-the-money options

Nish

Well-Known Member
#3
why in-the-money options record very poor trading volume?

thanks in advance
Options are basically Hedging Instruments , but now-a-days are wrongly used for earning QUICK bucks in short time !

ITM options have high Delta with intrinsic and time value and are considered as some-what CONSERVATIVE instruments and are more EXPENSIVE compared to OTM options hence have less STRATEGY buyers with less volume.

Retailers ( which are large in numbers) always prefer to buy CHEAP OTM options ( Lottery Trades ) in large numbers , instead of EXPENSIVE ITM options and hence mostly are losers !

If retailers stop buying OTM options, OPTION trades may no longer exist on stock exchanges and SMARTMONEY will never deal in OPTION instruments ! :)
 
#4
Options are basically Hedging Instruments , but now-a-days are wrongly used for earning QUICK bucks in short time !

ITM options have high Delta with intrinsic and time value and are considered as some-what CONSERVATIVE instruments and are more EXPENSIVE compared to OTM options hence have less STRATEGY buyers with less volume.

Retailers ( which are large in numbers) always prefer to buy CHEAP OTM options ( Lottery Trades ) in large numbers , instead of EXPENSIVE ITM options and hence mostly are losers !

If retailers stop buying OTM options, OPTION trades may no longer exist on stock exchanges and SMARTMONEY will never deal in OPTION instruments ! :)
and i have a question. options are basically to hedge your profolio. means if sudenly mkt falls and share prices goes down then the puts options might gain and compensate.. why call options are in place ?
 

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