Thursday, October 14, 2021

What are Nifty Options?

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Before understanding nifty options, first we need to understand what an option instrument is.

Just like derivatives futures, options too is an derivative product where the buyer holds a right to execute option of either buying or selling of shares or another underlying at a certain pre-determined price (also known as the strike price) during a pre-determined time period. The 2 types of Options are Call Options i.e. The Right to Buy and Put Options i.e. The Right to Sell.A Call option gives buyer an option to “BUY” underlying asset at an agreed upon price with a expiry date on this contract. Likewise Put gives buyer an option to “SELL” at agree upon price with a expiry date on this contract. Hence, Call buyer would want prices of the underlying to go up and put buyers would like to see prices of underlying falling.
Lot size of Nifty Options – 50 (Subject to revision from time to time)


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