Basics of Options (Calls & Puts)
There are two main types of options:
Call Option: Gives the holder the right to buy the underlying asset at a fixed price (called the strike price) before or on the expiry date.
Example: You buy a Reliance call option with a strike price of ₹2500. If Reliance rises to ₹2700, you can buy at ₹2500 and gain from the difference.
Put Option: Gives the holder the right to sell the underlying asset at the strike price before expiry.
Example: You buy a Nifty put option with a strike price of 22,000. If Nifty falls to 21,500, your put gains in value since you can sell higher (22,000) while the market trades lower.
In simple terms:
Calls = Right to Buy
Puts = Right to Sell
How Options Work (Premiums, Strike Price, Expiry, Moneyness)
Every option has certain key components:
Premium: The price you pay to buy the option. This is determined by demand, supply, volatility, and time to expiry.
Strike Price: The fixed price at which the option holder can buy/sell the asset.
Expiry Date: Options are valid only for a certain period. In India, index options have weekly and monthly expiries, while stock options usually expire monthly.
Moneyness: This defines whether an option has intrinsic value.
In the Money (ITM): Already profitable if exercised.
At the Money (ATM): Strike price equals the current market price.
Out of the Money (OTM): Not profitable if exercised immediately.
There are two main types of options:
Call Option: Gives the holder the right to buy the underlying asset at a fixed price (called the strike price) before or on the expiry date.
Example: You buy a Reliance call option with a strike price of ₹2500. If Reliance rises to ₹2700, you can buy at ₹2500 and gain from the difference.
Put Option: Gives the holder the right to sell the underlying asset at the strike price before expiry.
Example: You buy a Nifty put option with a strike price of 22,000. If Nifty falls to 21,500, your put gains in value since you can sell higher (22,000) while the market trades lower.
In simple terms:
Calls = Right to Buy
Puts = Right to Sell
How Options Work (Premiums, Strike Price, Expiry, Moneyness)
Every option has certain key components:
Premium: The price you pay to buy the option. This is determined by demand, supply, volatility, and time to expiry.
Strike Price: The fixed price at which the option holder can buy/sell the asset.
Expiry Date: Options are valid only for a certain period. In India, index options have weekly and monthly expiries, while stock options usually expire monthly.
Moneyness: This defines whether an option has intrinsic value.
In the Money (ITM): Already profitable if exercised.
At the Money (ATM): Strike price equals the current market price.
Out of the Money (OTM): Not profitable if exercised immediately.
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Hello Everyone! 👋
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Email: skytradingmod@gmail.com
WhatsApp: wa.me/7678446896
Feel free to ask any questions. I'm here to help!
Details:
Contact : +91 7678446896
Email: skytradingmod@gmail.com
WhatsApp: wa.me/7678446896
Powiązane publikacje
Wyłączenie odpowiedzialności
Informacje i publikacje przygotowane przez TradingView lub jego użytkowników, prezentowane na tej stronie, nie stanowią rekomendacji ani porad handlowych, inwestycyjnych i finansowych i nie powinny być w ten sposób traktowane ani wykorzystywane. Więcej informacji na ten temat znajdziesz w naszym Regulaminie.