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https://www.linkedin.com/posts/pjlal_trading-activity-6612926378453102592-BdP6
HKSI weekly Options: It's a new market and I am trading to see what opportunities I can find despite high buying and selling spread from 3 to 8 points and quite tiny volume. Today's result is in 25 minutes I was lucky to have 118% return for the day .
https://www.linkedin.com/posts/pjlal_hong-kong-weekly-options-and-derivatives-activity-6612247538928062464-NyYI
How buying options helps a disciplined trader build wealth from a small account?
Yesterday I chose weekly HKindex options trading to post two pictures which show investment required for buying Call and Put Options.
Hong Kong people don't like options. They are heavily into stocks. Both the Weekly and Monthly Options market is not that active and liquid and you can get frustrated when you can't find sellers to offset your bought options.
India and USA have daily volumes of option contracts running into billions while Hong Kong weekly options daily volume is less than 7,000.
Why did I then chose to trade Weekly HKindex options yesterday?
Just to educate the retail Hong Kong investors on the power of the leverage the bought options provide to a skillful and disciplined trader. An options buyer is able to control a futures contract of HKD$1,135,000 ((calculated assuming buying was done when index was 27,700 points @ $50 per point) by buying at $7500, a leverage of more than 150 times . No borrowing costs involved. No borrowing margin limit is needed from the broker.
An option buyer's risk risk is capped at $7,500.
If the index crashes by 1,000 points, the buyer does not have to pay even a cent extra
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