Option and future option trading basics
December 27, at 3: December 5, at 1: February 9, at 6:
Scenario 2 — Price goes down to Rs. December 9, at Since you are closing the trade before the expiry your profits will be the amount of premium you pay to buy minus option and future option trading basics amount of premium you received while selling it. In this example, the option buyer will neither make or lose money. July 29, at 6:
However, before the expiry your profitability is the difference in premium. December 31, at Before expiry we have to pay the brokerage twice. Premium must be trading at higher levels compared to 3.
The other thing is buying or selling an option and holding it till expiry…if you do this, then it is deemed that you are exercising your options. There are only 3 possible scenarios, out which 2 indeed benefit Venu. This gives Venu an edge, but like you mentioned, all the three scenarios have an equal probability of occurrence. The options market makes up for a significant part of the derivative market, particularly in India.
March 20, at 6: This versatility is not there in futures. October 30, at August 14, at 7: January 20, at 9:
This simply because it is not a market index. Introduction to Stock Markets 14 chapters 2. November 23, at Please provide rest of the module as soon as possible. On sites like moneycontrol.