India, Feb. 4 -- Option trading offers opportunities to generate income, hedge existing positions, or take directional market views with limited capital. However, without a clear risk management approach, losses can accumulate quickly.

Whether you are new to option trading or already active in derivatives, understanding how to control risk is essential to protecting capital and trading sustainably while using a demat trading app to execute trades efficiently.

Why Risk Management is Important in Option Trading? Options trading differs from equity investments because options operate as instruments which have fixed expiration dates. Even if the market moves slowly in your favour, the value of an option can still decline due to time decay....