Basics of Options Trading FAQs

How buying a put option is different from selling a call option ?

The Call Option allows you to purchase the underlying at a specific price and for a certain period of time, but not the obligation. The Put Option gives you the option to sell the underlying at a specific price and within a defined time.

If you are bearish and want to make a profit from the downturn in the price of an underlying, you can either sell or buy a Call Option.

The difference between buying and selling a call option

Selling a Call Option earns you a premium

To buy a put option, you pay a premium

Your profit is only as high as the premium you receive.

Profit is endless

If the price of the underlying increases significantly, you can lose everything.

Your losses are limited by the brokerage fee paid and the premium you paid.


What is the work of Options ?

How many types of Options ?

What is strike price of option ?

When does Options expire?

What is the process for trading options ?

How futures and Options are different ?

How Nifty can be traded ?

What will happen when an option expires out of money ?

Do I have to pay margin in Options ?

How can the Options contracts be settled ?

What do you mean by Covered Options ?

When do you mean by Naked Options ?

What does American Options refers to ?

What does European option mean? ?

In Options , What is the meaning of At-The-Money , Out-of-the-Money (OTM) and In-The-Money ?

How to take decision on either to buy /sell call Option or put Option ?

Is it possible to trade on option of any stock or index?

How Square off and exercise an Option is different ?

What does intrinsic value of an option mean and how to calculate intrinsic value of an option ?

What does time value of an Option mean ?