When you trade options, every contract is either a Call or a Put. These are the two basic building blocks of options trading, and understanding what each one does is essential before you start.<\/p>\n\n\n\n
Call Option<\/strong><\/p>\n\n\n\n A Call option gives you the right to buy an asset at a fixed price called the strike price before or on the expiry date. You buy a Call when you expect the price of the underlying stock or index to go up.<\/p>\n\n\n\n For example, if Nifty is at 22,000 and you expect it to rise, you buy a Nifty 22,200 Call option by paying a premium of \u20b9100. If Nifty rises to 22,500, your option gains value and you make a profit. If Nifty stays below 22,200, the option expires worthless and your loss is limited to the \u20b9100 premium you paid.<\/p>\n\n\n\n Put Option<\/strong><\/p>\n\n\n\n A Put option gives you the right to sell an asset at a fixed price before or on the expiry date. You buy a Put when you expect the price to go down.<\/p>\n\n\n\n For example, if Nifty is at 22,000 and you expect it to fall, you buy a Nifty 21,800 Put option by paying a premium of \u20b980. If Nifty falls to 21,500, your option gains value. If Nifty stays above 21,800, the option expires worthless and your loss is limited to the \u20b980 premium.<\/p>\n\n\n\n Buying vs selling options<\/strong><\/p>\n\n\n\n So far we have looked at buying Calls and Puts. You can also sell them this is called writing an option.<\/p>\n\n\n\n When you sell a Call, you are betting the price will not rise above the strike price. When you sell a Put, you are betting the price will not fall below the strike price. As a seller, you collect the premium upfront but your potential loss is unlimited if the market moves against you.<\/p>\n","protected":false},"author":65,"comment_status":"open","ping_status":"closed","template":"","format":"standard","meta":[],"ht_kb_category":[2849],"ht_kb_tag":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/ht_kb\/26183"}],"collection":[{"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/ht_kb"}],"about":[{"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/types\/ht_kb"}],"author":[{"embeddable":true,"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/users\/65"}],"replies":[{"embeddable":true,"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/comments?post=26183"}],"version-history":[{"count":1,"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/ht_kb\/26183\/revisions"}],"predecessor-version":[{"id":26185,"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/ht_kb\/26183\/revisions\/26185"}],"wp:attachment":[{"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/media?parent=26183"}],"wp:term":[{"taxonomy":"ht_kb_category","embeddable":true,"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/ht_kb_category?post=26183"},{"taxonomy":"ht_kb_tag","embeddable":true,"href":"https:\/\/www.samco.in\/help-support\/wp-json\/wp\/v2\/ht_kb_tag?post=26183"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}