Basic Concepts & Terminology
Before going deeper, let’s simplify the core terms in options trading:
Strike Price: The fixed price at which the buyer can buy (call) or sell (put) the asset.
Expiry Date: The date on which the option contract expires (e.g., weekly or monthly).
Option Premium: The cost paid by the buyer to the seller for getting this right.
Lot Size: Options are traded in lots, not single shares. Example: Nifty option lot = 50 units.
In-the-Money (ITM): When exercising the option is profitable.
Out-of-the-Money (OTM): When exercising the option is not profitable.
At-the-Money (ATM): When the strike price = current price of the underlying asset.
Example:
Suppose Reliance is trading at ₹2,500.
A Call option with strike 2,400 is ITM (because you can buy at 2,400, lower than 2,500).
A Put option with strike 2,600 is ITM (because you can sell at 2,600, higher than 2,500).
Before going deeper, let’s simplify the core terms in options trading:
Strike Price: The fixed price at which the buyer can buy (call) or sell (put) the asset.
Expiry Date: The date on which the option contract expires (e.g., weekly or monthly).
Option Premium: The cost paid by the buyer to the seller for getting this right.
Lot Size: Options are traded in lots, not single shares. Example: Nifty option lot = 50 units.
In-the-Money (ITM): When exercising the option is profitable.
Out-of-the-Money (OTM): When exercising the option is not profitable.
At-the-Money (ATM): When the strike price = current price of the underlying asset.
Example:
Suppose Reliance is trading at ₹2,500.
A Call option with strike 2,400 is ITM (because you can buy at 2,400, lower than 2,500).
A Put option with strike 2,600 is ITM (because you can sell at 2,600, higher than 2,500).
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La información y las publicaciones que ofrecemos, no implican ni constituyen un asesoramiento financiero, ni de inversión, trading o cualquier otro tipo de consejo o recomendación emitida o respaldada por TradingView. Puede obtener información adicional en las Condiciones de uso.
Hello Everyone! 👋
Feel free to ask any questions. I'm here to help!
Details:
Contact : +91 7678446896
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
Publicaciones relacionadas
Exención de responsabilidad
La información y las publicaciones que ofrecemos, no implican ni constituyen un asesoramiento financiero, ni de inversión, trading o cualquier otro tipo de consejo o recomendación emitida o respaldada por TradingView. Puede obtener información adicional en las Condiciones de uso.