The Role of Options in Hedging Against Market Volatility

Market volatility is an inherent part of financial markets, and it can create significant challenges for investors. However, options play a crucial role in hedging against market volatility and managing risk. The futures options trading provides investors with the flexibility to protect their portfolios and mitigate potential losses during periods of market turbulence. Here are some key aspects of the role of options in hedging against market volatility: Protective Puts: One popular strategy for hedging against market volatility is using protective puts. A protective put involves buying a put option on an underlying asset to offset potential losses in the event of a market downturn. By purchasing put options, investors have the right to sell the underlying asset at a predetermined ...

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