Options trading is on the rise in Singapore for many reasons. So why exactly is options trading on the rise in Singapore? There are a few key reasons.
Options offer investors a greater level of flexibility.
Options allow investors to tailor their investment strategies to their specific goals and risk tolerances. For example, if you are bullish on a particular stock, you can buy a call option to bet on the price rising. Alternatively, if you are bearish on a particular stock, you can sell a put option to bet on the price falling.
Options provide you with the ability to hedge your portfolios against market volatility.
Options can be used to hedge your portfolio against market volatility. For example, if you own a portfolio of stocks and are worried about a potential market crash, you can buy put options to protect your portfolio from losses. This hedging strategy is becoming increasingly popular as investors look for ways to safeguard their assets from market risks.
Options offer the potential for high returns, even in a low-yield environment.
Options offer the potential for high returns, even in a low-yield environment. It’s because options allow you to leverage your capital. For example, if you buy a call option with a strike price of $100 and the stock price rises to $120, your return will be 20%. If you bought the stock outright, your return would have been only 10%. This higher potential for returns is one of the main reasons options trading is on the rise in Singapore.
Options provide a way to trade without owning the underlying asset.
Options provide a way to trade without owning the underlying asset. It is known as trading on margin. If you wanted to buy shares of ABC Corporation, for example but didn’t have the cash to do so, you could buy a call option instead. It would give you the right to purchase the shares at a set price (the strike price) sometime in the future. If the stock price rose above the strike price, you could then exercise your option and make a profit.
Options can be used to generate income.
Options can be used to generate income. For example, if you are bullish on a particular stock, you can sell put options to bet on the price falling. If the stock price falls, you will keep the premium you received for selling the put option. This income generation strategy is becoming increasingly popular as investors seek ways to boost their returns in a low-yield environment.
Options trading is more accessible than before
Thanks to the internet, it’s now possible to trade options online from the comfort of your own home. You can open an account with an online broker and start trading options within minutes. This increased accessibility is one of the main reasons options trading is on the rise in Singapore.
The options market has grown exponentially in recent years.
The options market has grown exponentially in recent years. This growth is due to many factors, including the increasing popularity of options trading and the development of new options products. The options market is now worth more than $1 trillion and is expected to continue growing in the years ahead.
The Singapore Exchange offers a wide range of options for products.
The Singapore Exchange offers a wide range of options for products. It includes index options, equity options, and currency options. The Exchange also offers a variety of trading platforms, making it easy for investors to trade options online.
The Monetary Authority of Singapore has been supportive of the options market.
The Monetary Authority of Singapore has been supportive of the options market. In particular, the Authority has been working to promote the use of exchange-traded options. It’s because options offer many benefits, including the ability to hedge risk and generate income.
Bottom line
Options trading is here to stay. Thanks to its many benefits, options trading is likely to continue growing in popularity in Singapore and worldwide, so if you are interested, check it out at Saxo.