(Option Product)It is a derivative security product available in the stock market, which helps people to earn good amount of money in market.
It comes to Indian stock market in the year of 1995 and people used it generally for hedging to save their portfolio or making their own strategy to earn money in the stock market.
Let’s go something deep into option: –
When we are buying any option, we’re paying premium for this not margin. So, buying an option will get right for this product. But we don’t have the obligation, to buy or sell an underlying asset at a specific price on or before a certain date.
We can earn money in both the direction of market movement like up or down. When we have view that market will go upward direction, then will buy CALL Option and in down side direction will buy PUT Option.
It has different terminology to understand option securities. The following terminologies are given below.
(STRIKE PRICE): It is an underlying assets price, where the option product can buy or sell in the stock market. From this price the price go up (for CALL) and the price go down (for PUT) to get profit before expire date.
(SPOT PRICE): It is an underlying assets current price to buy or sell in the stock market.
TWO types of option are traded in market American Option and European Option. We are working in the European option in the Indian market.
|Nifty 25-May-2017 CE 9300|
|Index Name: Nifty||25-May-2017||European Call Option||Strike Price 9300|
|Nifty 25-May-2017 PE 9300|
|Index Name: Nifty||25-May-2017||European Put Option||Strike Price 9300|
|SBIN 25-May-2017 CE 290|
|Share Name: SBIN||25-May-2017||European Call Option||Strike Price 290|
|SBIN 25-May-2017 PE 290|
|Share Name: SBIN||25-May-2017||European Put Option||Strike Price 290|