Part 8 Trading Master Class

Rewards of Option Trading

Despite risks, options offer compelling advantages:

a) Limited Risk (for Buyers)

Option buyers know their maximum loss upfront—the premium paid.

b) High Return Potential

Small price movements in the underlying can result in substantial percentage gains.

c) Income Generation

Option sellers can generate consistent income through strategies like covered calls and iron condors.

d) Flexibility

Options allow traders to profit in bullish, bearish, or range-bound markets.

e) Capital Efficiency

Options require lower capital compared to buying underlying assets outright.