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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Details:
Contact : +91 7678446896
Email: skytradingmod@gmail.com
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Feel free to ask any questions. I'm here to help!
Details:
Contact : +91 7678446896
Email: skytradingmod@gmail.com
WhatsApp: wa.me/7678446896
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
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
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.