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Part 4 Learn Institutional Trading 1. How Option Trading Works Imagine two traders: Rahul (Call buyer) thinks Infosys will go up. Neha (Call seller) thinks Infosys will stay flat or fall. Infosys spot = ₹1500. Rahul buys a Call option at 1520 strike for a premium of ₹20. Lot size = 100 shares. If Infosys rises to ₹1600, Rahul gains (1600 – 1520 = ₹80 profit – ₹20 premium = ₹60 net profit per share × 100 = ₹6,000). Neha loses ₹6,000. If Infosys stays below 1520, Rahul’s option expires worthless, and his maximum loss is ₹2,000 (premium paid). This shows how option trading is a zero-sum game: one’s profit is another’s loss. 2. Option Premium & Its Components The premium you pay for an option has two parts: Intrinsic Value (IV): Real profit if exercised now. For Call = Spot Price – Strike Price. For Put = Strike Price – Spot Price. Time Value (TV): Extra value due to time left till expiry (uncertainty = potential). As expiry nears, time value decays (Theta decay). 3. Moneyness in Options Options are classified based on relation between spot price & strike price: In the Money (ITM): Option has intrinsic value. Example: Spot ₹1600, Call strike ₹1500 = ITM. At the Money (ATM): Spot = Strike. Example: Spot ₹1600, Call strike ₹1600. Out of the Money (OTM): Option has no intrinsic value, only time value. Example: Spot ₹1600, Call strike ₹1700. 4. Participants in Options Market Hedgers – Reduce risk (e.g., an investor hedges stock portfolio with put options). Speculators – Take directional bets for profit. Arbitrageurs – Exploit price differences across markets. Option Writers (Sellers) – Earn premium by selling options, often institutions. 5. Why Trade Options? Benefits & Uses Leverage: Control large positions with small capital. Hedging: Protect portfolio against adverse moves. Flexibility: Multiple strategies for bullish, bearish, or neutral markets. Income Generation: Selling options can provide steady income. Risk Defined (for buyers): Maximum loss = premium paid. 6. Risks in Option Trading Unlimited Loss (for sellers): Option writers can face huge losses. Time Decay: Buyers lose money if market stays sideways. Volatility Trap: Sudden volatility crush can wipe out premiums. Complexity: Requires deep knowledge of Greeks & strategies. Liquidity Risk: Some options have low trading volume.

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Part 2 Ride The Big Moves 1. How Options Work in Practice Suppose you buy a call option: Stock XYZ = ₹200. Call strike = ₹210. Premium = ₹5. Expiry = 1 month. If the stock rises to ₹230 before expiry: Profit = (230 – 210) – 5 = ₹15 per share. If the stock stays below ₹210: Loss = Premium paid = ₹5. So the risk is limited to the premium, but the profit can be large. 2. Why Do People Trade Options? Speculation – Traders use options to bet on price movements with limited risk. Hedging – Investors buy puts to protect their portfolios (like insurance). Income Generation – Selling options (like covered calls) can generate steady income. Leverage – Options allow control of large positions with small amounts of money. 3. Option Buyers vs. Option Sellers Option Buyer Pays the premium. Has rights but no obligation. Risk is limited to the premium. Profit potential can be high. Option Seller (Writer) Receives the premium. Has an obligation to buy/sell if the buyer exercises. Risk can be unlimited (in case of naked options). Profit is limited to the premium received. 4. Strategies in Option Trading Options are flexible. Traders combine calls and puts in creative ways to form strategies. Some common ones: Covered Call – Holding a stock and selling a call against it for extra income. Protective Put – Buying a put option to protect against downside risk in stocks. Straddle – Buying both a call and a put at the same strike to profit from big moves either way. Iron Condor – Selling both a call spread and a put spread to profit from low volatility. Bull Call Spread – Buying one call and selling another at a higher strike to reduce cost. Each strategy balances risk and reward differently. 5. Risks in Option Trading While options are powerful, they also carry risks: Time Decay – Options lose value as expiry approaches. Volatility Risk – Options are sensitive to changes in volatility. Liquidity Risk – Some options have low trading volume, making entry/exit difficult. Unlimited Loss (for sellers) – A naked call seller can face huge losses if stock rises sharply. Complexity – Misunderstanding option behavior can lead to unexpected losses. 6. Benefits of Option Trading Flexibility – You can profit in rising, falling, or sideways markets. Leverage – Control large exposure with small capital. Hedging – Protect your portfolio against downside risk. Defined Risk (for buyers) – Maximum loss is limited to the premium. Income Opportunities – Selling options can generate consistent returns.

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Part 1 Support and Resistance 1. Introduction to Option Trading Option trading is a sophisticated financial instrument used widely in modern markets for hedging, speculation, and portfolio management. Options are derivatives, meaning their value is derived from an underlying asset, such as stocks, indices, commodities, or currencies. Unlike buying or selling the underlying asset directly, options give traders the right—but not the obligation—to buy or sell the asset at a predetermined price within a specific timeframe. The global options market has grown exponentially, as institutional investors, retail traders, and hedge funds recognize the flexibility, leverage, and risk-management capabilities of options. They are integral to strategies ranging from simple protective hedging to complex arbitrage trades. 1.1 What Is an Option? An option is a contract that grants its holder certain rights: Call Option: The right to buy the underlying asset at a specific price (strike price) before or on a specified expiry date. Put Option: The right to sell the underlying asset at a specific price before or on a specified expiry date. Unlike futures or forwards, which carry obligations, options give the holder flexibility, making them versatile tools for both risk mitigation and speculative opportunities. 2. Key Terminology in Option Trading Understanding option trading requires familiarity with certain fundamental terms: Strike Price: The predetermined price at which the underlying asset can be bought (call) or sold (put). Premium: The price paid to buy the option. This is influenced by time value, intrinsic value, volatility, and market conditions. Expiry Date: The date on which the option contract expires and becomes void. In-the-Money (ITM): An option with intrinsic value (e.g., a call option with a strike price below the current market price). Out-of-the-Money (OTM): An option with no intrinsic value (e.g., a call option with a strike price above the current market price). At-the-Money (ATM): An option where the strike price equals the current market price. Underlying Asset: The financial instrument (stock, index, commodity, or currency) on which the option is based. Volatility: A measure of the asset's price fluctuations, which directly impacts option pricing.

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Universal Ibogaine in the Virtual Growth Conference Universal Ibogaine Inc. is going to participate in the 2022 Virtual Growth Conference presented by Maxim Group LLC and hosted by M-Vest.