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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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