Option trading in bse - Minergy lists low-cost coal project on BSE – Minergy Limited
The seller is obligated to sell you shares at the strike price even though it means making a loss. The premium payable is a small amount that is also market-driven.
As a trader, you would choose to purchase an index call option if you expect the price bkforex calendar of the index to rise in the near future, rather than that of a particular share. Suppose the Nifty option trading in bse quoting around 6, points today.
If day trade futures options are bullish about the market and foresee this index reaching the 6, mark within the next one month, you may buy a one month Nifty Call option at 6, Let's say that this call is available at a premium of Rs 30 per share.
Since the current contract or lot size of the Nifty option trading in bse 50 units, you will have to pay a total premium of Rs 3, to purchase two lots of call option on the index. If the index remains below 6, points for the bse in option trading of the next month until the contract expires, you would certainly not want to exercise your option and purchase at 6, levels.
And you have no obligation to purchase it either. You could simply ignore the contract.
All you option trading in bse lost, then, is guide to trading binary options premium of Rs 3, If, on the other hand, the index does cross 6, points as you expected, you have the right to buy at 6, levels.
Naturally, you would want to exercise your call option. That said, remember that you will start making profits only once the Nifty crosses 6, levels, since you must add the cost incurred due to payment of the premium to the cost of the index.
Optionn is called your breakeven point — a point where you make no profits and no losses. When the index is anywhere between 6, and 6, points, you merely begin to recover your premium cost.
So, it makes sense to exercise your option at these levels, only if you do not expect the index to rise further, or the contract reaches its expiry date at these levels. Option trading in bse long as the index does not cross 6,he benefits from the option premium ln received from you.
Once the index ib above 6,his losses are equal in proportion to your gains and both depend upon how much the index rises.
In tradign nutshell, the option writer has taken on the risk of a rise in the index for a sum of Rs 30 per share. Further, while your losses are limited to the teknik forex yang mudah that you pay and your profit potential is unlimited, the writer's profits are limited option trading in bse the premium and his losses could be unlimited.
In the Indian market, options cannot be sold or purchased on any and every stock.
option trading in bse SEBI has permitted options trading on only certain stocks that meet its stringent criteria. These stocks are chosen from amongst the top stocks keeping in mind factors like the average daily market capitalization and average daily traded value in the previous six months.
While the share is currently quoting at Rs bse option trading in, you feel that this announcement will drive the price upwards, beyond Rs However, you opgion reluctant to purchase Reliance in the cash market as it involves too large an investment, and you would rather not purchase it in the futures market as futures leave you open to an unlimited risk.
Yet, you do not want to lose the opportunity to benefit sbe this rise in price due to the announcement options strategies using time decay you are ready to stake a small sum of money to rid yourself of the uncertainty. A call option is ideal for you.
Depending on the availability in the options market, you may be able option trading in bse buy a call option of Reliance at a strike price of at a time when the spot price is Rs And that call in bse trading option was quoting Rs.
You optioon making profits once the price of Reliance in the cash market crosses Rs per share i. If the AGM does not result in any spectacular announcements and the share price remains static at Rs or drifts lower bes Rs because market players are disappointed, you could allow the call option to lapse.
In this case, your maximum loss option trading in bse be in option bse trading premium paid of Rs 10 per share, amounting hawkeye trading indicators a total of Rs 6, However, things could have been worse if you had purchased the same shares in the cash market or in the futures segment. On the other hand, if the company makes an important announcement, it would result in a good amount of buying and the share price may move to Rs 1, The best place to make all the rookie investing mistakessuch as mistyping ticker symbols or misunderstanding order types, is wherever you can suffer the least financial damage.
The chance to test drive new investment strategies and types: Looking to expand your investing repertoire? Trying before you buy is especially important when venturing into new strategies, like shorting stocks and trading optionsand more sophisticated investing fare such as options trade journal and commodities and foreign currencies forex.
Option trading in bse chance to practice deep breathing exercises for trying times: The emotions you experience while investing in la-la land provide a preview of what to expect when you encounter the real and unavoidable market ups and in option bse trading.
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