Why Options...

Well the obvious question is if I want to be active trader, why options? or why derivatives at all?

Why not stick with old school stocks and do some intra-day trading and make merry. Internet is full of stories telling you how risky derivatives can be (its not for nothing that they are called financial WMDs).

Well, to be honest, tracking individual stock, its sector, peers (fundamentally) or its chart, indicators and trend (technically) everyday is not my peg of vodka. I would rather like to take a call as where Nifty or Sensex will move in next one month. That, to me, comes a lot easily and more often than not, I have found it to be fairly in sync with my expectations.

Now, I would have loved to trade some stock like Nifty whose value is defined by 50 stocks it comprises of. Mathematically speaking too, it is a lot easier to understand masses and their reactions rather than predicting behavior of individual (though I am no mathematician, I can vouch for this).

So basically, I feel comfortable in predicting trend for Nifty and can follow one chart technically. So I basically have two options... ;-))), one option is 'Options' and second option is 'Futures' to take a call on Nifty. Out of the two, with the initial reading I found Options easier to grasp and needing less money to start.

So Options it is and they got a head start.

Off to that peg of vodka I mentioned earlier...