NSE Options Derivatives. Charts, Tomorrow's Predictions, Technical Reports, Ratios, OpenInterest

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This article gives an introduction to Options and serves as a beginners guide to those who want to nse stock option charts them.

Just like Futures which we covered in a previous postoptions are derivatives that are traded on an underlying stock in case of an NSE stock. This article hopes to demystify options and ensure that you trade them properly. An option can be of two types, American or European.

Owners of American-style options may exercise at any time before the option expires, while owners of European-style options may exercise only at expiration.

In India, the NSE stock options are American style and can be exercised and sold at any time before expiration, while all index options are European style and can be exercised only at expiration.

There nse stock option charts two types of options one need to understand: A call buyer is betting that the stock is going to go up in the future, and a put buyer is betting that the stock will go down in the future. When you buy a call option, it gives you a right to buy a stock at a certain price called the strike price before a certain date called an expiry date.

The expiry date for all listed stock options in the India States is the last Thursday of the contract month, which is the month when the contract nse stock option charts. However, when that Friday falls on a holiday, the expiry date is on the Nse stock option charts immediately nse stock option charts the last Thursday. So, how does one make or lose money if INFY goes up or down.

It is very simple actually. Lets take a call option as an example. On the expiry date, if INFY is trading atthen the call would be worth Rs at expiry because if you were to exercise your right to buy, you could buy INFY at and sell it in the open market at and make a Rs gain.

Then the option would expire worthless, and you would lose all your money, i. A put option works the exact opposite, where the option price goes up as the nse stock option charts falls.

The meaning of these terms is described in the following table. But how does one use Technical Analysis TA to trade options? Should you really do TA on an option chart? You generally analyze the underlying stock technically and then make a decision to adopt a bullish option strategy if you are bullish e.

It would nse stock option charts been better option time decay was mentioned in the above write up. Time decay is the biggest enemy of option traders. Your email address will not be published. There are 3 scenarios we need to look at: In Investar, it is easy to find out any option for any scrip that is either of the above. Beginners usually get attracted by the high percentage gains provided by options and feel that they can get rich quickly by trading options.

But, nothing can be farther from the truth! From the above example itself, it is clear that the risk in trading options is pretty high. In fact the majority of option buyers lose money because not only you have to get the timing right, but you are also betting on the stock to reach your target by a certain expiry date, which makes it all the more difficult.

Indian stock market does not allow retail investors to short stocks and carry positions for delivery. This is another reason why options are popular because they allow you to be short on a stock e.

If this is the strategy you want to use, you should use Deep-in-the-money PUT option as they are much more likely to move in nse stock option charts with the stock. There are many factors to consider like greeks and volatility when trading options, but the nse stock option charts point to remember is that you cannot get option trading right unless you perfect the timing of your entries and exits.

Because if you get your timing wrong, then your capital will erode in no time! Although the odds may be against option buyers, there are other less risky ways to trade options e. Thanks for the feedback! Leave a Reply Cancel reply Your email address will not be published. Out of the Money. Stock trading above the strike price. Stock trading below the strike price.

Stock trading at the strike price. Deep In the Money. Stock trading way above the strike price. Stock trading way below the strike price.

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