The highest option volume strikes showcase the most bought and sold options of the day. The information about the volume of these options can be further used to analyze stocks to buy, stocks to sell, taking into consideration both volume and open interest. Use the data for the option chain, put option, call option, strike price, of these stock options to make better informed investing decisions.
The stock market today is expected to open lower based on the stock futures about 2 hours before today’s trading session. With the stock market crash and selloffs for stocks, it is time to protect your portfolio. Investing is about risk management and risk, plus volatility is now at extreme levels.
A hedging strategy is important for trading and investing. Especially now, as global stock markets decline trying to find the bottom and stocks have lost a significant amount during the past weeks.
Hedge your risks using options
“Hedging strategies are used by investors to reduce their exposure to risk in the event that an asset in their portfolio is subject to a sudden price decline. When properly done, hedging strategies reduce uncertainty and limit losses without significantly reducing the potential rate of return.
Usually, investors purchase securities inversely correlated with a vulnerable asset in their portfolio. In the event of an adverse price movement in the vulnerable asset, the inversely correlated security should move in the opposite direction, acting as a hedge against any losses. Some investors also purchase financial instruments called derivatives. When used in a strategic fashion, derivatives can limit investors’ losses to a fixed amount. A put option on a stock or index is a classic hedging instrument.”
Options market overview for the US stock market, February 21, 2020. There are many options trading strategies, but options are very risky financial instruments and derivatives, and can have huge losses, even losing the entire capital for traders and investors. They are derivatives suitable for investors with knowledge and eager to accept large amount of risk soa s to make a large return due to their leverage. It is highly advisable to search for options trading simulator and read some options trading books if you have never invested in options before. They can offer a larger return comapred to stocks, but they have also a higher risk. Make your research about stocks to buy or stocks to sell before deciding to trade options, call options or put options. If you hear that options trading is easy, it is not true. On the contrary due to risk and time decay options trading is too difficult.