Trader A also buys a Put for a lower amount in the same scrip just in case the stock market crashes. Now if the stock market goes up, the trader will make money from his call, if the stock market goes down the trader will make money from his put.
No!! I am not implying you will always make money in the stock market! Please don’t start to login into your demat account.
What I am trying to imply is that the trader has used Mitigation as a Risk Management Strategy.
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