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All About Options 👇
Hello Everyone👋
Today we will be talking about What are Options
So let us get Started,
What is Options Trading :-
Options trading is a type of trading specific security on a specific date at a time and closing it at the date on which the options are getting to end. Here end doesn't mean the options are going to end forever it means that options are getting end of that month on stocks and every Thursday of Index in Indian markets. Many people also trade options because they can be taken in less Money, Eg:- Bajaj Finance is 7300 currently now but its option can be taken in 4000 or even 3000, that's why people try in Options. As stock prices are very volatile, options prices are even more volatile than Stock shares. Options are generally risky but some of the options strategies are relatively less risky. Options trading may seem very complicated at first, but it's easy to understand if you know a few key points like Option greeks, How money burns in Option, How Options eat money in Range bound and etc. Anybody who wants to trade options can do it simply just following the steps:-
To trade options there are just four steps but for basics
1. Have a very good knowledge of options otherwise just go away from here and do what you are doing
2. If the First Step is Done then Open a trading account
3. Pick which option to buy or sell
4. Predict the market and then select the strike price
What are the " Two main " types of options :-
There are two main types of options: calls and put, Call options allow us to buy the options at a fair price whereas Put options are the opposite of call options, Put options allow us to sell the options at a fair price. You can see further for more details about them.
What is Call in Options ?
Call Option :- In call options, a position is taken when a contract is purchased from the seller. In this transaction, you have to give back the shares to the seller from which you have taken and what you pay to him is your premium called, the seller is given a premium to sell shares at the strike price.
What is Put in Options ?
Put Option :- In put options, a position is taken when a contract is purchased from the seller. In this transaction, you have to give back the shares to the seller from which you have taken and what you pay to him is your premium called, the seller is given a premium to sell shares at the strike price.
See I have told you about call seller and put seller we also say them as " Writer " so don't get confused between them
What is Call Buying and Call Selling ?
Call Buying :- When we buy a Call, we pay the options premium in exchange to get the rights to buy shares at the strike price on a certain date, Investors most often buy calls when they are bullish on a stock.
Call Selling :- When we are selling a Call option, we are selling its rights to someone of the underlying security at a set price before a specific date. The seller gets a premium for agreeing for delivering the security for a pre-set price before a set date if the buyer is demanding
Which is Better Between them :-
If the stock price moves up significantly then buying a call option is much better than owning the stock like the seller. If the market is In a range then Call selling is a nice option because a call seller doesn't lose a premium like the Call Buyer in ranging markets.
Example of an Options Contract :-
Just assume that you have forecasted XYZ and got the market will go up, So now you have decided to buy up a call and selected a strike price so that selected strike price trade at 130 now, and a call seller is looking for selling calls at 140 with a time limit of 1 month. If the share price lies below 140 till the end of the option, then the call seller keeps the shares and collects a premium by selling them to anyone else.
What is Put Buying and Put Selling ?
Put Buying :- When we buy a Put, we pay the options premium in exchange to get the rights to buy shares at the strike price on a certain date, Investors most often buy Puts when they are bearish on a stock.
Put Selling :- When we are selling a Put option, we are selling its rights to someone of the underlying security at a set price before a specific date. The seller gets a premium for agreeing for delivering the security for a pre-set price before a set date if the buyer is demanding.
Which is Better Between them ?
If the stock price moves down significantly then buying a Put option is much better than owning the stock like the seller. If the market is In a range then Put selling is a nice option because a call seller doesn't lose a premium like the Put Buyers in ranging markets.
Example of an Option Contract :-
Just assume that you have forecasted XYZ and got the market will go down, So now you have decided to buy up a put and selected a strike price so that selected strike price trade at 130 now, and a put seller is looking for selling calls at 140 with a time limit of 1 month. If the share price lies below 140 till the end of the option, then the call seller keeps the shares and collects a premium by selling them to anyone else.
The Important Thing :-
Like this Idea and Follow us on Trading view.
Bye Bye Hope You all Love it
We will be meeting very soon till the next idea
Have a Nice day and health
Today we will be talking about What are Options
So let us get Started,
What is Options Trading :-
Options trading is a type of trading specific security on a specific date at a time and closing it at the date on which the options are getting to end. Here end doesn't mean the options are going to end forever it means that options are getting end of that month on stocks and every Thursday of Index in Indian markets. Many people also trade options because they can be taken in less Money, Eg:- Bajaj Finance is 7300 currently now but its option can be taken in 4000 or even 3000, that's why people try in Options. As stock prices are very volatile, options prices are even more volatile than Stock shares. Options are generally risky but some of the options strategies are relatively less risky. Options trading may seem very complicated at first, but it's easy to understand if you know a few key points like Option greeks, How money burns in Option, How Options eat money in Range bound and etc. Anybody who wants to trade options can do it simply just following the steps:-
To trade options there are just four steps but for basics
1. Have a very good knowledge of options otherwise just go away from here and do what you are doing
2. If the First Step is Done then Open a trading account
3. Pick which option to buy or sell
4. Predict the market and then select the strike price
What are the " Two main " types of options :-
There are two main types of options: calls and put, Call options allow us to buy the options at a fair price whereas Put options are the opposite of call options, Put options allow us to sell the options at a fair price. You can see further for more details about them.
What is Call in Options ?
Call Option :- In call options, a position is taken when a contract is purchased from the seller. In this transaction, you have to give back the shares to the seller from which you have taken and what you pay to him is your premium called, the seller is given a premium to sell shares at the strike price.
What is Put in Options ?
Put Option :- In put options, a position is taken when a contract is purchased from the seller. In this transaction, you have to give back the shares to the seller from which you have taken and what you pay to him is your premium called, the seller is given a premium to sell shares at the strike price.
See I have told you about call seller and put seller we also say them as " Writer " so don't get confused between them
What is Call Buying and Call Selling ?
Call Buying :- When we buy a Call, we pay the options premium in exchange to get the rights to buy shares at the strike price on a certain date, Investors most often buy calls when they are bullish on a stock.
Call Selling :- When we are selling a Call option, we are selling its rights to someone of the underlying security at a set price before a specific date. The seller gets a premium for agreeing for delivering the security for a pre-set price before a set date if the buyer is demanding
Which is Better Between them :-
If the stock price moves up significantly then buying a call option is much better than owning the stock like the seller. If the market is In a range then Call selling is a nice option because a call seller doesn't lose a premium like the Call Buyer in ranging markets.
Example of an Options Contract :-
Just assume that you have forecasted XYZ and got the market will go up, So now you have decided to buy up a call and selected a strike price so that selected strike price trade at 130 now, and a call seller is looking for selling calls at 140 with a time limit of 1 month. If the share price lies below 140 till the end of the option, then the call seller keeps the shares and collects a premium by selling them to anyone else.
What is Put Buying and Put Selling ?
Put Buying :- When we buy a Put, we pay the options premium in exchange to get the rights to buy shares at the strike price on a certain date, Investors most often buy Puts when they are bearish on a stock.
Put Selling :- When we are selling a Put option, we are selling its rights to someone of the underlying security at a set price before a specific date. The seller gets a premium for agreeing for delivering the security for a pre-set price before a set date if the buyer is demanding.
Which is Better Between them ?
If the stock price moves down significantly then buying a Put option is much better than owning the stock like the seller. If the market is In a range then Put selling is a nice option because a call seller doesn't lose a premium like the Put Buyers in ranging markets.
Example of an Option Contract :-
Just assume that you have forecasted XYZ and got the market will go down, So now you have decided to buy up a put and selected a strike price so that selected strike price trade at 130 now, and a put seller is looking for selling calls at 140 with a time limit of 1 month. If the share price lies below 140 till the end of the option, then the call seller keeps the shares and collects a premium by selling them to anyone else.
The Important Thing :-
Like this Idea and Follow us on Trading view.
Bye Bye Hope You all Love it
We will be meeting very soon till the next idea
Have a Nice day and health
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