As of now a lot of people on the internet portray themselves as finfleuncers show that they earn huge money using options. They show that they earn huge money by option buying or selling. Buy the problem option buying and selling is quite a risky thing to do. And mostly beginners falls for it.
PC: Pixabay.com
They think that buying individual stocks requires huge money to earn bug but when you have less money then buying options is best thing to earn big and in the process a lot of people lose their money. There was a survey that 90% of the people lose their money in futures and options and this is true too.
The problem is options is just for hedging and not actually a way to earn money. In simple terms if you have a position in a stock and that is more than 1 lot then people usually buy or sell options so that if there was a sudden decline in the market their position will be hedge against that. Like I am buying Niftybees every month and when I have the number of shares of it equals to 1 lot then I will too hedge my portfolio so that if the Nifty 50 declines a lot I will still be n profit.
Now there are two ways to earn money if you are hedging using the options. First way is that if the price of the shares increases you get the profit of the price rise. And next is that you will sell the option so that if the market goes down then you will earn the money from the options you are selling. Thus you are earning from both ways and you will not lose money in the process.
So yeah if you are someone seeing those posts earning huge because of options, don't fall into trap. It can be misleading or they might have a hedging and earning from it. So there is no shortcut in earning money from stocks you have to earn it by fair or square.
