What are futures and options trading in india


You can get top share trading tips in India with us. Understanding Options What is an Option? Bullish Premium to be paid:

In the above case study 1, the CALL option seller would have received the premium of from the option buyer initially. This is the break-even point i. Any price movement of the spot above would yield us profit.

The option seller is thus under an obligation to execute the contract. This is the break-even point i. If the spot breaks below 90, say 70 the premium goes up to say This is a loss making zone for our position if the option is exercised. It is recommended to always opt for a ITM option.

If stop loss is triggered in cash segment, exit your option position also. If the spot rallies abovesay the premium goes up to say Any price movement of the spot below 90 would yield us profit. This is a scenario when for a call option; the strike price is above the stock price and for a put option the strike price is below the stock price in what are futures and options trading in india cash market. As the stock price moves in the cash market, the option price also moves.

This predefined period is last Thursday of every month for Indian stock markets. At the money ATMIn the money ITM and Out of the money OTM are the three terms which are used to describe the relationship between the options strike price and the price of the underlying asset stock. The option seller is thus under an obligation to execute the contract. It is the day when the option is exercised. Bearish Premium to be paid: