Part 6 Learn Institutional Trading

Hedging

Investors use options to protect portfolios from sudden market falls.

Example:

You own Infosys shares

You buy a put as insurance

If the price falls, the put offsets the loss

Leverage

With a small premium, you can control a large position.

Example:

A stock worth ₹1,00,000 can be controlled by paying ₹5,000 premium.