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Briefly discuss the importance of the options market and purposes that they serve in the market....

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Finance

Briefly discuss the importance of the options market andpurposes that they serve in the market. List and discuss one proand one con about these speculative strategiesusing a real-world example. Protective puts and covered calls arewidely used hedging strategies. Give a realexample of how and why you would use these two strategies alongwith an advantage and disadvantage of each.

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The options market help us in hedging our positions and provide the muchneeded risk management which the stock market alone cant provide They are very useful for professions like importers exporters farmers etc because they help them achieve a steady stream of cash without worrying about the change in market    See Answer
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Briefly discuss the importance of the options market andpurposes that they serve in the market. List and discuss one proand one con about these speculative strategiesusing a real-world example. Protective puts and covered calls arewidely used hedging strategies. Give a realexample of how and why you would use these two strategies alongwith an advantage and disadvantage of each.

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