Index options enable investors to gain exposure to a broad share
market, with one trading decision &
frequently with one transaction.
To obtain the same level of diversification using individual stocks
or / individual equity options, numerous
decisions & trades would be necessary.
Since, broad exposure can be gained with one trade, transaction
cost is also reduced by using Index Options.
As a percentage of the underlying value, premiums of Index options
are usually lower than those of equity options as equity options are more volatile
than the Index.
No comments:
Post a Comment