Long Call The Strategy A long call gives you the right to buy the underlying stock at strike price A. Calls may be used as an alternative to buying stock outright.
A put option contract with a strike price of is trading at Rs. If you expect that the price buying options strategy Nifty will surge in the coming weeks, so you will sell strike and receive upfront profit of Rs.
This transaction will result in net credit because you will receive the money in your broking account for writing the put option.
The Bottom Line There are seven factors or variables that determine the price of an option. Of these seven variables, six have known values, and there is no ambiguity about their input values into an option pricing model.
This will be the maximum amount that you will gain if the option expires worthless. If the market moves against you, then you should have a stop loss based on your risk appetite to avoid unlimited loss.
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So, as expected, if Nifty Increases to or higher by expiration, the options will be out of the money at expiration and therefore expire worthless. You will not have any further liability and amount of Rs.
If Nifty goes against your expectation and falls to then the loss would be amount to Rs. Following is the payoff schedule assuming different scenarios of expiry.
How to make profit using bullish option trading strategies?
For the ease of understanding, we did not take into account commission charges and Margin. Analysis of Short Put Option Trading Strategy A short put options trading strategy can help in generating regular income buying options strategy a rising or sideways market but it does carry significant risk and it is not suitable for beginner traders.
A Bull Put Spread involves one short put with higher strike price and one long put with lower strike price of the same expiration date. A Bull Put Spread is initiated with real binary option to positive view in the underlying assets.
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When to initiate Bull Put Spread Bull Put Spread Option strategy is used when the option trader believes that the underlying assets will rise moderately or hold steady in the near term. It consists of two put options — short and long put. How to Construct the Bull Put Spread?
Strike price can be customized as per the convenience of the trader.