Divergence Secrets

Options vs Futures

Futures = Obligation to buy/sell at fixed price.

Options = Right but not obligation.

Options require smaller margin (if buying).

Real-Life Example of Hedging

Suppose you own TCS shares worth ₹10 lakhs. You fear the market may fall in the next month.

👉 Solution: Buy a Put Option.

Strike: Slightly below current market price.

Cost: Small premium.

If market falls → Loss in shares covered by profit in Put.

If market rises → You lose premium but enjoy profit in shares.

This is like insurance.

Psychology of Options Trading

Options require quick decision-making. Traders often get trapped in:

Over-leverage → Buying too many lots.

Greed → Holding positions too long.

Fear → Exiting too early.
Successful option traders follow discipline, risk management, and proper strategy.