Options are that form of derivative instruments used by the investors, mostly retail investor who wish to give a boost or high to their portfolios use this form of leverage. Also, such investors do not want to take the risk of borrowing money and thus choose the path of a call option.

With call options, you can get leverage that is risk-adjusted and thus you are able to magnify the returns, whether it be losses or profits.

If you are an investor, you’ll soon realize that stock market is not what it seems to be. Its performance is always unexpected. The stocks which are termed good rarely advance and the stocks termed bad do not always perform badly. Click here to know in detail about the performance of the stocks.

Very soon into the stock market, you’ll also realize that reality is far away from what is generally predicted by the analysis of the financial companies. You as an investor have two ways to respond to this behavior of the market – you can either sit back quietly or do something about it.

These five ways will help the investors or investment companies beat the market whatever be the circumstances, whether bearish or bullish. You can gain knowledge about these investment options from various brokers and online websites.

• Options offer you that way of not sitting quietly and doing something about it.
• if you are an owner of stock already, you can also use the call options to provide leverage to your portfolio.
• You can also use options as a safe haven where you would not have to worry or would not be at any loss even in the case of failure.
• Options offer you the means to provide leverage in the safest possible way as there are no or minimum risks involved. It is considered as the least risky method to enrich your portfolio. When you use options, you’ll just put the initial amount invested on risk, rather than larger risks involved in borrowing money. Also, with options, you have the freedom to choose your course of action and are under no obligation.
• Options also allow the investors to take high risks with small amounts of premium. You can also create unique and innovative strategies to deal and manage your investment when you are using call options, depending upon the market strategies and volatility of the market.

The bull call spread and the bull put spread are the most common of all the strategies. Depending on the market conditions these strategies can provide varied protection to different users. Almost everybody now a day uses options to provide leverage to their portfolios as using options is the easiest way to boost the portfolio at minimum risk. Mutual fund managers and pension fund managers also make use of the options to stock their portfolio.

Options are generally used by the advanced investor but they can also be used to create leverage and also manage risk at times. Using options can be quite complicated at times. Hope this article helped you know and understand the strategies to be used so as to use options in investment market to enhance your stock portfolios.

Options are that form of derivative instruments used by the investors, mostly retail investor who wish to give a boost or high to their portfolios use this form of leverage. Also, such investors do not want to take the risk of borrowing money and thus choose the path of call options.

With call options, you can get leverage that is risk-adjusted and thus you are able to magnify the returns, whether it be losses or profits.