Options are Not Optional Now

Financial derivative market is an ever-evolving arena, which keep on developing new products for further ease of business to its participants. It started with designated spot markets then to forwards, which augmented to futures and then to Options. Till recent time options were considered to be optional among majority of market participants, but with current pace of increased participants in option trading, it seems options will be integral part to trade/track for every serious participant to capital market whether its equity, commodity or currency. 

And reason is simple, ease of doing business i.e. options give opportunity value similar to cash and futures but with a lesser capital requirement and limited risk/better risk management, at a lower cost. This thing played so well that today equity markets majority turnover is coming from options. 

When major business is happening in options then how one can afford to neglect them if he wants to track the respective stock/index/commodity/currency. One must have to track options and understand their modus operandi, if not want to participate. Going one step further when majority liquidity is attracted to this instrument then to execute a bulk trade one must has to avail/leverage this. 

Options have become loved instrument across segments, including retail players who now does both writing and buying, earlier retail was always on buy side only leaving exceptions. A long term trader/investor or a scalper who finish his all trades daily before market close, are leveraging options. 

We consider this phase as an early starting phase for options in Indian market, those who are equipped with relevant expertise on it will make a good fortune at least for coming three years. 

Currently Nifty and Bank Nifty are most liquid and most traded options in Indian market, followed by some blue chip stocks, currency USDINR options and little in commodities like crude, metals, bullion and Guar Complex.