Why trade in options ?

why-trade-in-optionsA normal trader said that Buy at low and Sell on high, but this strategy is work when the market is in bull condition. One of the greatest benefits of options is you can trade in any market conditions up, down and sideways.
If you think that stock price is going up you can buy a call option and if you can think the price of a stock is going to down you can buy a put option. The call option gives the right to the trader to buy the stock at a specific price while a put option gives the right to the trader to sell stock at a specific price.
Firstly Options are sold in contracts and the price you have to pay for each option is called premium. Second thing is that option cost a fraction of the stock price, suppose you pay a premium for option contract is Rs 20 per shares and the price of underlying stock is Rs 100 per shares now if you buy call option the value of the option contract is moving according to stock price while if you buy put option which generally moves is opposite direction of the stocks.
Traders can easily cut their losses and protect gains with a relatively small cash outlay. The traders can use options for portfolio insurance.