The investor should ideally optimize for a strangely. There is various strategies. There are various strategies like bull spread, etc, which can be used accordingly to the view that an investor has on the market, and the risks that e foresees in the market, and the risks that he foresees in the investment decision. Which strategies limit the returns on the investment decision? While strategies limit the return on the investment decision. While strategies limit the returns on the investment, losses are also limited. Thus strategies are a good hedging mechanism for the investor. Along with opting for strategies, the investor should not hold the options up to maturity, because the value of the option keeps on diminishing with the premium paid companies of time value, which is subject to decay with passing of decay with passing of days. In case if a stock price starts falling, the price of the future and also the premium on option will also start falling, and vice versa. So in case the investor has taken a call say a buy or a sell, and the stock moves in the opposite direction, the investors should either start averaging or square off the position open for a belonged period of time.
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