Index Options are effective enough to appeal to a broad spectrum
of users, from conservative investors to more aggressive share market traders.
Individual investors / traders might wish to capitalize on market
opinions (bullish, bearish or / neutral)
by acting on their views of the broad market or one of its many sectors.
The more sophisticated market professionals might find the variety
of index option contracts excellent tools for enhancing market timing decisions
and adjusting asset mixes for asset allocation.
To a
market professional, managing the risk associated with large equity positions
may mean using index options to either reduce their risk or to increase market
exposure.
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