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About Us. MyM C X. Awareness Corner Introduction to Commodity Options. Introduction to Commodity Options. Based on the right of the holder, options are of two types: Call options: It gives buyer the right to buy the underlying Put options: It gives buyer the right to sell the underlying Based on exercise, options can primarily be of two types: American: The buyer can choose to exercise the option at any time before the expiry of the option contract. European: The buyer can choose to exercise the option only on the date of expiration of the contract.

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IQ Option Tutorial Hindi Full guide for trading India - Opções & Estratégias

When writing a put, the writer agrees to buy the underlying stock at the strike price if the contract is exercised. Writing, in this case, means selling a put contract in order to open a position. And in exchange for opening a position by selling a put, the writer receives a premium or fee, however, he is liable to the put buyer to purchase shares at the strike price if the underlying stock falls below that price, up until the options contract expires.

Profit on put writing is limited to the premium received, yet losses can be rather substantial, should the price of the underlying stock fall below the strike price. Put writing generates income because the writer of any option contract receives the premium while the buyer obtains the option rights. If timed correctly, a put-writing strategy can generate profits for the seller, as long as he is not forced to buy shares of the underlying stock. Thus, one of the major risks the put-seller faces is the possibility of the stock price falling below the strike price, forcing the put-seller to buy shares at that strike price.

If writing options for income, the writer's analysis should point to the underlying stock price holding steady or rising until expiry. Each put contract is for shares. Therefore, the option is not exercised. This is the ideal scenario for a put option writer. The next use for writing put options to get long a stock at a discounted price. Instead of using the premium-collection strategy, a put writer might want to purchase shares at a predetermined price that's lower than the current market price. In this case, the put writer could sell a put with a strike price at which they want to buy shares.

The aforementioned scenarios assume that the option is exercised or expires worthless. However, there is an entire other possibility. A put writer can close his position at any time, by buying a put. For example, if a trader sold a put and the price of the underlying stock starts dropping, the value of put will rise. The put seller is not obliged to wait until expiry. They can plainly see that they're in a losing position and may exit at any time.

Selling puts can be a rewarding strategy in a stagnant or rising stock since an investor is able to collect put premiums. In the case of a falling stock, a put seller is exposed to significant risk, even though the profit is limited. Put writing is frequently used in combination with other options contracts.

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At the top you will see the space for searching stocks. In orange colour Equity will be written. Let us see how does it look like.


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At first we will see, how to search option chain data for stocks. Once you clicked the name searched, a new page will appear with all the statistics. You need to click on Option Chain at the top right as showed below. Once you click on option chain a new page will appear with all the option chain data included.

In green box spot price of the stock.

Expiry of the contract in red box. In blue box all the calls and puts option data.

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We will learn all individually later in blog. Just see the data and observe this points. You can make change in expiry of the contract as well. How to Analyze Nifty Options chain? Nifty is an combination of top 50 stocks, hence we term it as Index. Nifty is Index of highly active stocks on NSE.

To find the nifty50 option chain, we need to select the equity derivative option in orange box. Once selected in the search box type nifty and click on it.

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Similar to stocks, click on option chain mentioned on top right. In the image below pay attention to boxes in different colours. In red box price of nifty in spot current market. Green includes all the calls and put options data available. In orange box different strike price, and in black box net change change in premium price.

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In the image below, orange box reflects all call option data. Whereas at right side Put Option. Have you observed the data is given in different colours. Basics of Option Trading In India: Before we begin to understand all the terms present in option chain table, let us know basic of option trading and about Moneyness of an option contract.

Basic of Put Option: On the other hand, Put Option is a contract that gives you the right but not the obligation to sell the underlying at a specified price and within the expiration date of the Option.


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  • Moneyness of an option contract: Moneyness in options can be define as the association between the strike price of an options contract and the price of the underlying security. There are three main classification that are used to describe the moneyness of an options contract. How to read Options Chain? What is Volume In Option Chain? What is Implied Volatility IV in option chain? The positive changes are indicated in green while negative changes, decrease in price, are indicated in red.

    Bid Qty: It is the number of buy orders for a particular strike price. This tells you about the current demand for the strike price of an Option. Ask Qty: It is the number of open sell orders for a particular strike price.