Advanced Institutions Option Trading - Part 4

Technical and Fundamental Analysis in Option Trading
Fundamental Analysis: Evaluate company value, earnings, sector performance

Technical Analysis: Price action, patterns, indicators like RSI, MACD

IV & HV Tools: Helps in choosing optimal strike prices based on volatility

Understanding market structure is essential for timing entries/exits in options.

Advanced Institutional Options Trading
Institutions like hedge funds, banks, and proprietary desks use options for complex strategies:

Delta Hedging: Maintain a neutral position

Portfolio Insurance: Using puts during economic downturns

Volatility Arbitrage: Capitalizing on volatility mispricing

Structured Products: Combine options with bonds or equities for customized payoff

These strategies require deep understanding of volatility surfaces, risk models, and massive capital.