Options In Stock Market- Learning the Easy Way

Contract Size: The size of a contract is the amount to be delivered in the contract choices. These quantities are determined for substance. If the contract

The option of a contract is to give the buyer the right, but not the obligation, to buy or sell the property at a fixed price.

Option agreement

  1. Deposit or Payment:

    The owner of this type of contract must pay a fixed premium amount for the successful implementation of the transaction. If the cardholder does not pay, he only loses the good. Usually, the premium will be deducted from the gross profit and the investor receives the balance.
  2. Price Strike:

    This is a combination where an owner can choose to buy or sell security if they choose to exercise a contract. The price impact is fixed and does not change the term of the contract. It's important to remember the difference between a strike and a market. These changes are for the duration of the contract.
     options trading
  1. Contract Size:

    The size of a contract is the amount to be delivered in the contract choices. These quantities are determined for substance. If the contract is for one hundred shares, the contract holder will buy or sell an option for one hundred shares.
  2. Expiration date:

    Each contract has a specified expiration date. And this remained in force until the end of the contract. If the option is not implemented at this time, it will exit.
  3. Intrinsic Value:

    The intrinsic value is the selling price minus the current price of the underlying security. Silver Call Settings have an inherent value.
  4. Assignment:

    Do not buy, sell or trade insurance with a well-organized contract. A contract arises when the owner exercises the right to trade. In the event that the owner does not exercise his right to a termination, the contract is terminated and the obligation will be null.
  5. No obligation to buy or sell:

    In the case of an option contract, the investor has the option of buying or selling the property until the expiry date. But you don't have to buy or sell. If the option holder neither buys nor sells, the option does not expire.

     Option Trading

2 types of option contracts

  1. Call Option
  2. Put Option

For example: We have the ability to identify in front of us. The price of the trust will rise to Rs 2,390 and the merchant lets the stock price rise, in which case it will buy the option contract. Each option expires on Thursday of the month as well as indexes that expire on Thursday of the month. You can purchase the lots on the call option, supported on our 505 lot stock. But yesterday it was paid in full, which is equivalent to Rs 1206.950. In order to make things easier, the premium will be paid in this case, which is 2% of the total amount or 24139. If prices rise from 2390 to 2500, the buyer will be able to keep up with his profit and the unlimited options. Profit and loss are limited to the amount of the reward to be paid. This is exactly contrary to the seller's ballot, where losses are limited and profits are limited to the amount of the good.

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