Options Trading for Indices: Complete Guide for Indian Markets

20 min read

By Chainika Thakar

In the ever-evolving financial landscape, options trading stands as a dynamic strategy, and index options have gained significant traction within India's markets. Particularly, the Indian markets have witnessed a surge in the popularity of index options trading, a fascinating arena within the realm of derivatives.

This guide aims to provide a comprehensive overview of index options trading, catering to both beginners and seasoned investors seeking to enhance their understanding of this complex field.

Whether you're seeking risk management tools or exploring new investment avenues, this guide equips you to navigate the dynamic realm of index options trading in Indian markets with confidence.

All the concepts covered in this blog are taken from this Quantra learning course on Options Trading Strategies In Python: Basic.

This blog covers:


Options trading in brief

Options trading involves the buying and selling of contracts that give you the right, but not the obligation, to buy or sell an asset (like stocks, commodities, or indices) at a specific price (strike price) before a certain date (expiration).

There are two main types:

  • Call Options: These give you the right to buy an asset at a predetermined price before the expiration date. Traders often buy call options if they expect the asset's price to rise.
  • Put Options: These give you the right to sell an asset at a predetermined price before the expiration date. Traders may buy put options if they expect the asset's price to fall.

Options provide flexibility and can be used to speculate, hedge against potential losses, or generate income. However, if the options' predictions don't come true, you may lose the amount you invested (the premium). Options trading involves risks and requires understanding of market movements, time decay, and other factors.

Let us learn more about the basic terminologies of options trading with this video below.


Current scenario of options trading in Indian markets

Options trading has gained significant traction in the Indian financial markets. With increasing participation from retail and institutional investors, the options segment has witnessed substantial growth. The National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) offer a wide range of options contracts on various underlying assets, including stocks and indices.

The introduction of weekly options, mini contracts, and options on commodities has added diversity to the market. Retail traders, in particular, have shown a growing interest in options due to their flexibility, limited risk, and potential for higher returns. However, challenges such as liquidity concerns, complex strategies, and regulatory constraints still persist.

The current scenario reflects a dynamic landscape where options trading is becoming an integral part of investment portfolios, offering opportunities for profit and risk management. As the market continues to evolve, traders and investors can capitalise on this trend by staying informed and adapting their strategies to navigate the complexities of options trading in the Indian markets.

The National Stock Exchange (NSE) on July 12, 2023 announced a revision in the expiry days for futures and options contracts of Bank Nifty and Nifty Midcap Select. Starting from September 4, 2023, Bank Nifty's weekly F&O contracts are supposed to expire on Wednesdays instead of Thursdays.


Index and Index options trading

Index

An index, in the context of finance, is a measurement tool used to track the performance of a group of related assets, such as stocks, bonds, or other securities. It serves as a representation of the overall market or a specific sector within the market. Indices provide insights into market trends, investor sentiment, and economic health.

Indices are constructed using specific methodologies. They aggregate the prices or values of a selected basket of assets and calculate a single value that reflects the collective performance of those assets. Indices can be broad, covering the entire market, or narrow, focusing on a specific sector, industry, or theme.

A prominent example of indices includes the Nifty 50, representing 50 large-cap stocks on the NSE in India. This index acts as a benchmark for evaluating investment performance and can be traded through financial instruments such as index funds, exchange-traded funds (ETFs), and index options.

Index options trading

  • Definition: Index options are financial derivatives that derive their value from an underlying index. They provide the holder with the right but not the obligation to buy (call option) or sell (put option) a specified index at a predetermined price within a specified timeframe.
  • Purpose: Index options allow investors to speculate on the direction of the underlying index's price movement, hedge against potential losses in their portfolios, or generate income through options strategies.
  • Components: The underlying asset of index options is the index itself, which represents a group of related assets. Index options give investors exposure to the performance of the entire index without the need to hold individual securities.
  • Trading: Index options are actively traded financial instruments. Investors can buy or sell index options on various exchanges. The value of index options is influenced by factors like the underlying index's movement, time remaining until expiration, and market volatility.

In summary, while indices represent the performance of a group of related assets and serve as benchmarks, index options are financial derivatives that provide investors with the ability to speculate on or hedge against the movements of those indices.


Types of index options

Each type of index option provides a unique way to engage with the market, offering traders the flexibility to tailor their strategies according to their views and preferences.

Let us find out some common types of index options below.

Types of index options
Types of index options

Broad Market Index Options

These options are based on a broad market index that represents the overall stock market's performance. Traders can speculate on the general direction of the market using these options.

Let us take the example S&P 500 Index Options. Following are the further details.

  • Trading Exchange: Chicago Board Options Exchange (CBOE)
  • Expiration: Typically monthly, with various expiration dates available.
  • Usage: Investors use S&P 500 options for portfolio hedging, income generation, and speculation.
  • Trading Volume: High trading volume due to popularity.
  • Open Contracts: Large open interest due to liquidity.

Sectoral Index Options

Sectoral index options are tied to specific industry sectors. Traders can focus on the performance of a particular sector by using these options.

Let us take the example of Nifty Bank Index Options (India) which will have following details.

  • Trading Exchange: National Stock Exchange (NSE) of India
  • Expiration: Monthly and weekly options are available.
  • Usage: Traders use Nifty Bank options to speculate on or hedge against movements in the banking sector.
  • Trading Volume: High during earnings seasons and economic events.
  • Open Contracts: Varies but can be substantial.

Volatility Index (VIX) Options

India’s VIX options are based on the VIX by CBOE Volatility Index, often referred to as the "fear index." They enable traders to hedge against or speculate on market volatility. India VIX has very low liquidity and does not get traded much. It represents the market's expectation of volatility over the next 30 days. The value of the India VIX can fluctuate significantly based on market conditions, economic events, and investor sentiment.

VIX options measure market volatility expectations. Traders can use these options to hedge against or speculate on market volatility.

VIX Index Option can provide traders with a way to manage or capitalise on expected fluctuations in market volatility.

For example, India VIX Index Option is traded on NSE (National Stock Exchange of India).

The Indian traders can use options based on the India VIX to hedge against or speculate on potential fluctuations in market volatility.

Below are the details for our example.

  • Trading Exchange: CBOE Global Markets
  • Expiration: Typically monthly, with weekly options available.
  • Usage: Traders use VIX options to hedge against market volatility or speculate on future volatility levels.
  • Trading Volume: Can surge during market turbulence.
  • Open Contracts: Tends to vary based on market conditions.

Global Index Options

Global index options provide Indian traders with exposure to the performance of international markets. This allows traders to participate in global trends and events without directly investing in foreign stocks.

Usually, global index options are typically traded on international exchanges. But there is an example of the MSCI emerging markets index option which is traded on Indian exchanges offering international products.

It enables Indian traders to speculate on or hedge against movements in the MSCI Emerging Markets Index, representing a basket of stocks from emerging market economies such as China, Brazil, Taiwan etc. This offers insights into the performance of economies beyond India's borders.

The MSCI Emerging Markets Index tracks the performance of companies from developing economies. It's used as a benchmark for investors to assess emerging market equities. It's not directly traded but serves as a reference. Exchange-traded funds (ETFs) and mutual funds aim to replicate its performance. Trading hours for related ETFs depend on the exchange where they're listed.

Small-Cap and Mid-Cap Index Options

Small-cap and mid-cap index options are linked to indices that track the performance of smaller and mid-sized companies. These options provide traders with exposure to specific market segments beyond large-cap stocks.

For example, Nifty Midcap 100 Index Option is traded on NSE (National Stock Exchange of India)

Traders can use options based on the Nifty Midcap 100 Index to speculate on or hedge against movements in mid-sized companies' stock prices. This allows them to target a different market segment compared to broader indices like the Nifty 50.

Let us also take a look at the further details below.

  • Expiration: Monthly and weekly options.
  • Usage: Traders target mid-cap stock movements using Nifty Midcap 100 options.
  • Trading Volume: Active among traders focusing on mid-cap companies.
  • Open Contracts: Varies based on market conditions.

Dividend Index Options

Dividend index options are tied to indices that track the performance of stocks with high dividend yields. These options allow traders to speculate on or hedge against movements in dividend-focused indices, offering exposure to income-generating stocks.

For example Nifty Dividend Opportunities 50 Index Option is traded on NSE (National Stock Exchange of India).

Now, you're a trader in India interested in dividend-paying stocks. You see that the Nifty Dividend Opportunities 50 Index is traded on the NSE. This index represents stocks with high dividend yields.

You buy call options on this index, expecting its value to rise. If the index goes up, the value of your options may increase. However, you won't receive the actual dividends from the stocks in the index. Instead, you're speculating on the index's price movement. This allows you to potentially benefit from dividend-related movements without directly holding the stocks or receiving the dividends.

In short, the benefit from dividend index options comes from potential profits resulting from correct predictions about the movement of the underlying index's value, and from the ability to manage risks associated with dividend-focused portfolios.

Here are other details surrounding the example of the Nifty Dividend Opportunities 50 Index

  • Expiration: Monthly options.
  • Usage: Traders may use these options to speculate on dividend-focused strategies.
  • Trading Volume: Moderate, depending on investor interest in dividend themes.
  • Open Contracts: Varies based on market conditions.

Growth vs. Value Index Options

Growth vs. value index options allow traders to position themselves based on the performance of growth-oriented or value-oriented stocks. These options provide exposure to different investment styles within the market.

These are two distinct options contracts that are traded on the National Stock Exchange of India (NSE). Each option is associated with a different type of index, one focused on growth-oriented stocks and the other on value-oriented stocks.

They are mentioned together because they are both options contracts related to the Nifty 100 Index. The Nifty 100 Index is a broad market index that includes both growth and value stocks, and the NSE has created options based on different aspects of this index's composition.

For example, Nifty 100 Growth Index Option vs. Nifty 100 Value Index Option is traded on NSE (National Stock Exchange of India).

The Nifty 100 Growth Index represents companies with high growth potential, while the Nifty 100 Value Index includes companies that are considered undervalued. Traders can use options based on these indices to tailor their strategies according to their preference for growth or value stocks.

Custom Index Options

Custom index options are designed based on specific criteria, allowing traders to target specialised market segments or themes. These options provide flexibility to align trading strategies with unique preferences. Custom index is specifically designed to suit the clients’ investment strategies.

For example, there can be a custom index designed by a financial firm to track companies at the forefront of technological disruption. It can then include companies from various sectors like artificial intelligence, cybersecurity, and biotech.

This index helps investors gauge the performance of innovative companies driving technological advancements, offering a unique investment opportunity beyond traditional market indices.


Elements of index options

Understanding the elements of index options is crucial for navigating these derivative instruments. Index options provide traders with unique opportunities to gain exposure to a basket of stocks or specific market segments.

In this section, we delve into the essential components that constitute index options, offering insights into how these instruments function enabling traders to make informed decisions based on a comprehensive understanding of their elements.

These elements are:

Elements of index options
Elements of index options

Expiration and settlement

Expiration and settlement are vital aspects of index options that determine the timeline and processes governing these contracts. Expiration refers to the date when an option contract ceases to be valid. In the Indian market, index options typically have monthly expiration cycles. Settlement, on the other hand, can be either cash-settled or physically settled.

Cash settlement involves the exchange of the option's intrinsic value in cash, while physical settlement entails the delivery of the actual underlying assets represented by the index. Understanding these mechanisms aids traders in planning their positions and managing their exposure effectively.

Trading platforms

Trading platforms serve as the digital arena where traders execute their index options transactions.

In the Indian markets, leading exchanges such as the NSE provide robust electronic platforms for trading index options. These platforms offer real-time data, order execution capabilities, and various tools for analysis. To trade on the NSE, retail traders need to open an account with a registered brokerage firm that is connected to the exchange.

Through their brokerage accounts, retail traders can place orders, manage their portfolios, and engage in index options trading, taking advantage of the resources provided by the NSE's electronic platform.

Traders can access option contracts, monitor price movements, and place orders with ease. Familiarity with the functionalities and features of these trading platforms empowers traders to efficiently execute their strategies.

For example, Kite is a popular trading platform known for its simplicity and intuitive design. It offers features like live streaming market data, advanced charting, options chain analysis, and order placement with a single click. It caters to both novice and experienced traders.

Tools for trading

Successful trading of index options necessitates the utilisation of various tools for analysis, risk management, and decision-making. Traders commonly rely on technical analysis tools like charts, trendlines, and indicators to identify trends and patterns.

Let us find out the tools for trading below:

  • Options Calculators: Tools like the Black-Scholes calculator help traders estimate option prices, potential profits, and break-even points based on inputs like strike price, time to expiration, and implied volatility.
  • Technical Analysis Software: Platforms like TradingView offer advanced charting tools, technical indicators, and drawing tools. Traders can analyse price patterns, trends, and implement strategies based on chart patterns.
  • Volatility Indicators: The Volatility Index (VIX) can serve as a gauge for market sentiment and implied volatility. It helps traders assess the expected magnitude of price swings and make informed decisions.
  • Risk Management Tools: Position sizing calculators aid in determining the appropriate size of a trade based on risk tolerance and stop-loss levels. These tools help traders manage their risk exposure effectively.

By leveraging these trading platforms and tools, traders can efficiently engage with index options, make well-informed decisions, and navigate the complexities of the market landscape.

Summary

Options calculators help assess potential profits, losses, and breakeven points for different strategies. Moreover, volatility indicators aid in gauging market sentiment. By integrating these tools, traders enhance their ability to make informed choices, evaluate risk, and optimise their trading outcomes in the dynamic landscape of index options.


How do index options work?

Index options in the Indian context function similarly to options on individual stocks.

Index options offer traders exposure to a diversified basket of stocks, allowing them to speculate on market trends or implement strategic hedges. Understanding the workings of index options empowers traders to navigate the market effectively and make informed decisions.

Let us see how they are based on broader market indices like the Nifty 50 or the Sensex.

Here's how they work:

Underlying Index

Index options derive their value from an underlying stock market index. For instance, Nifty 50 Index options are based on the Nifty 50, which represents the performance of the top 50 stocks on the National Stock Exchange (NSE).

Contract Specifications

Each index option contract specifies the underlying index, contract size (lot size), expiration month, and strike price. The lot size refers to the quantity of the underlying index represented by one contract.

Call and Put Options

Index options come in two types: call options and put options. A call option gives the holder the right to buy the underlying index at a specified strike price before or on the expiration date. A put option provides the right to sell the underlying index at a predetermined strike price by the expiration date.

Speculation and Hedging

Traders use index options for speculation and hedging. Speculators aim to profit from price movements of the underlying index, while hedgers use options to protect their portfolios from adverse market moves.

Premium and Exercising

To acquire an index option, traders pay a premium to the seller. If the option holder decides to exercise the option before or on the expiration date, they can either buy or sell the underlying index at the predetermined strike price.

Cash Settlement

In the Indian market, most index options are cash-settled, which means that upon exercise or expiration, the difference between the option's strike price and the closing value of the underlying index is settled in cash.

Expiration and Trading Cycles

Index options have standardised expiration dates, usually the last Thursday of the month. They follow three monthly cycles: the near-month (current month), the next-month, and the far-month (third month). New contracts are introduced as the old ones expire.

Liquidity and Volume

The Nifty 50 and Sensex are highly liquid indices, resulting in significant trading volume for their options. High liquidity ensures ease of entering and exiting positions.


What is the difference between stock option and index option?

Aspect

Stock Options

Index Options

Underlying Asset

Individual stocks

Broad market indices

Diversification

Exposure limited to one company's performance

Exposure to multiple stocks in the index

Liquidity

Varies by stock; popular stocks often liquid

Generally more liquid due to index size

Risk

Company-specific events impact price

Diversification may mitigate company risk

Volatility

Potentially higher volatility in specific stocks

Index volatility reflects market sentiment

Expiration

Standard expiration cycles, based on the stock

Standard expiration cycles, usually monthly

Taxation

Tax implications vary by jurisdiction

Tax treatment may differ for index options

Strategies

Strategies based on specific stock outlook

Strategies based on overall market movement


Regulations and taxation of index options in Indian market

Regulations

  • SEBI: The Securities and Exchange Board of India (SEBI) regulates the securities and derivatives market in India, including index options. SEBI establishes rules and guidelines to ensure transparency, fairness, and investor protection.
  • Exchanges: National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) are the primary platforms for trading index options. These exchanges have their own rules, listing requirements, and trading mechanisms for index options.
  • Contract Specifications: SEBI mandates standardised contract specifications for index options, including lot size, strike intervals, and expiration cycles. This ensures uniformity and clarity for market participants.

Taxation

  • Income Tax: Profits and losses from trading index options are treated as capital gains. Short-term capital gains (holding period < 1 year) are taxed at the individual's applicable income tax rate, while long-term capital gains (holding period ≥ 1 year) are taxed at a lower rate with indexation benefits.
  • Transaction Taxes: Traders need to pay Securities Transaction Tax (STT) on both buy and sell transactions of index options. STT rates are relatively lower for options compared to stocks.
  • Other Charges: Along with STT, traders incur charges like brokerage, exchange transaction charges, and Goods and Services Tax (GST) on brokerage and charges.
  • Speculative Business Income: For frequent traders, if trading index options is considered a business activity, it may be treated as speculative business income and taxed at regular slab rates.
  • Hedging and Speculation: Depending on the intent (hedging or speculation), the taxation treatment might differ. Hedging activities could impact tax liability.

It's crucial for traders to consult with a tax advisor or financial expert to understand the specific tax implications based on their trading activities and individual circumstances. Tax regulations can change, so staying informed is essential for accurate tax planning and compliance.


What are the benefits of index options in India?

Index options is a versatile tool for traders and investors looking to navigate the dynamic Indian market while managing risks and capitalising on market opportunities.

Here are the benefits of the same:

Benefits of index options
Benefits of index options
  • Diversification: Index options provide exposure to a basket of stocks rather than a single company. This diversification helps mitigate risks associated with individual company events.
  • Lower Company-Specific Risk: Stock-specific news or events may significantly impact individual stocks. Index options can help traders avoid such specific risks and focus on broader market trends.
  • Strategic Hedging: Traders can use index options to hedge their portfolios against market downturns. This helps protect investments from adverse market movements.
  • Cost-Effective Exposure: Purchasing index options requires a fraction of the cost of buying all the underlying stocks in the index. It allows traders to gain exposure to the entire market segment without a substantial investment.
  • High Liquidity: Major indices like Nifty 50 and Sensex have high trading volumes, ensuring ample liquidity for index options. This liquidity enables easy entry and exit from positions.
  • Flexibility in Strategies: Index options offer a range of trading strategies, from speculation on market direction to implementing complex options strategies like spreads and straddles.
  • Market Sentiment Indicator: Changes in index options' open interest and trading volume can provide insights into market sentiment and potential upcoming trends.
  • Diverse Timeframes: Index options are available with different expiration dates, allowing traders to match their trading strategies with specific time horizons.
  • Reduced Company Research: Traders don't need to conduct in-depth research on individual companies. Instead, they can focus on macroeconomic factors and market trends.
  • Access to Broad Market Trends: Index options enable traders to capitalise on overall market movements, whether bullish, bearish, or range-bound.
  • Speculation on Market Indices: Traders can speculate on the performance of the overall market or specific market segments through index options.
  • Portfolio Management: Index options offer portfolio managers a tool to manage risk exposure across multiple stocks within a single trade.

Challenges of trading in index options in India and ways to overcome

Challenge

Explanation of Challenge

Ways to Overcome

Volatility and Risk

Market volatility can lead to unexpected price swings.

Use options strategies like spreads to manage risk.

Higher volatility can increase option premiums.

Implement stop-loss orders to limit potential loss.

Liquidity Concerns

Low liquidity can impact execution and bid-ask spread.

Choose highly liquid index options for trading.

Illiquid options may result in slippage.

Trade during high trading volume periods.

Complexity for Beginners

New traders may find options trading complex.

Start with basic strategies; gradually advance.

Misunderstanding strategies can lead to losses.

Invest in education and use virtual trading tools.

Emotional Decision-Making

Emotional trading can lead to impulsive decisions.

Stick to predefined trading plans; avoid emotions.

Fear and greed can impact decision-making.

Practise disciplined risk management.

Market Information

Lack of timely and accurate information can affect trades.

Use reliable data sources and analysis tools.

Inadequate research can lead to uninformed choices.

Stay updated on market news and trends.

Overtrading

Frequent trading can lead to excessive commissions.

Set a limit on the number of trades per day.

Overtrading may increase exposure to market risk.

Focus on quality trades over quantity.

Unpredictable Events

Sudden market news or events can disrupt strategies.

Stay informed and adapt strategies as needed.

Black swan events can cause extreme price movements.

Incorporate risk management in every trade.

By recognising these challenges and implementing appropriate strategies, traders can enhance their ability to navigate the complexities of index options trading in the Indian market and make more informed decisions.


Potential future of options trading in Indian markets

In the words of Economic Times, “Options market picked up post 2020 and one of the reasons of a sharp rise could be that investors just wanted to see quick money. For someone who does not want to hold on to positions for too long considering the volatility – options is the best place. Another reason is that brokers have started giving API integration and they have started promoting the algo front which has also increased the volume.”

Seeing the recent booming situation of options market, the future of options trading in Indian markets holds significant promise, driven by various factors shaping the financial landscape such as:

  • Increasing Participation: As awareness about derivatives and options trading grows, more retail traders and investors are likely to participate, contributing to increased trading volumes.
  • Broader Product Offerings: Exchanges might introduce new and innovative index options, catering to different market segments and offering a wider range of trading opportunities.
  • Advanced Technology Adoption: Technology advancements, such as algorithmic trading and high-frequency trading, are likely to play a pivotal role in the future of options trading, improving execution efficiency.
  • Educational Initiatives: Continued educational efforts by exchanges, regulatory bodies, and financial institutions are expected to enhance understanding and adoption of options trading among market participants.
  • Risk Management Focus: Traders and investors will increasingly recognize the importance of options in risk management strategies, resulting in more sophisticated hedging practices.
  • Liquidity Enhancement Measures: Exchanges might introduce initiatives to enhance liquidity in index options, making it easier for traders to enter and exit positions.
  • Global Integration: As Indian markets become more interconnected with global markets, the popularity of trading international indices through options could rise.
  • Regulatory Reforms: Regulatory authorities could introduce reforms to further streamline options trading, potentially reducing transaction costs and expanding the market.
  • Institutional Participation: Institutional investors might increase their participation in options trading, leading to enhanced market depth and stability.
  • Investor Awareness: Enhanced investor education and awareness programs could result in more informed decision-making and responsible trading practices.
  • Automated Trading: Automation and use of trading algorithms might become more common, offering traders efficient execution and risk management.
  • Market Digitization: The growing trend towards digital financial services could lead to innovations in mobile trading apps and platforms, making options trading more accessible.

While these projections are based on current trends, it's important to remember that market dynamics can evolve rapidly. Staying informed, adapting to changes, and continuously learning about options trading will remain essential for success in the future Indian options market.


FAQs

Now, let us find out answers to some of the frequently asked questions below.

How to hedge a portfolio with index options?

To hedge a portfolio, investors can buy index put options. These options gain value if the market drops, offsetting portfolio losses and providing insurance against market downturns.

Index funds are favoured due to their broad diversification across a market index, reducing risk. Their low fees and consistent returns attract investors who prefer a passive investment approach aligned with overall market trends.

What is an index option settlement?

Index option settlement is typically cash-settled. Upon option expiration, the difference between the index value and the option's strike price is settled in cash, without the need for physical asset delivery.

What is a single listed index option?

A single listed index option is an exchange-traded option linked to a specific index. It allows traders to speculate on the index's movement without owning the underlying assets, providing flexibility and convenience.

What is the maximum life of the index option?

An index option's maximum life is determined by its expiration date. Index options have predefined expiration cycles, offering monthly, quarterly, or longer-term options. Once an option expires, it becomes inactive.


Bibliography


Conclusion

In the dynamic landscape of the Indian financial markets, index options have emerged as a powerful and popular trading strategy. This comprehensive guide has illuminated every facet of index options trading, from their fundamental concepts to advanced strategies.

By offering exposure to diverse market segments, index options empower traders to speculate, hedge, and manage risk effectively. From broad market indices to sectoral and thematic options, traders can tailor their strategies to align with their market views.

While challenges such as volatility, liquidity concerns, and complexity persist, this guide equips traders with insights and tools to overcome them. With a focus on risk management, utilising trading platforms, and leveraging analytical tools, traders can confidently engage with index options.

As the Indian markets continue to evolve, the future of index options trading holds promise. Increasing participation, innovation in product offerings, and technological advancements are on the horizon.

From beginners seeking to grasp the basics to experienced traders looking to refine their strategies, this guide serves as a valuable resource. Index options remain a dynamic instrument in the financial toolkit, offering avenues to navigate market trends, manage risk, and capitalise on opportunities.

If you wish to learn more about options trading for indices, you can explore our free options trading course named "Options Trading Strategies In Python: Basic". This is an essential course for beginners in options trading. It starts with basic terminology and concepts you must know to be able to trade options. Furthermore, it covers the concept of moneyness, put-call parity, volatility and its types, hedging with options, and various options trading strategies.


Disclaimer: All data and information provided in this article are for informational purposes only. QuantInsti® makes no representations as to accuracy, completeness, currentness, suitability, or validity of any information in this article and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. All information is provided on an as-is basis.

Machine Learning in Momentum Trading 2024