How to trade option in nifty - What are Call Options & How to Trade them | Kotak Securities®

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He has experienced both prosperous and challenging times in the markets over the past 11 years, which has shaped his trading strategy to generate maximum revenue during uncertain times. He believes that being innovative and adaptable is key to success in the world of trading.

tfade Johann has been trading Forex for over a decade. He has managed offshore accounts for a local firm out of Salt Lake City in the USA, as well as trading on his own account in his private capacity.

He got his first taste of the markets through Share Direct and after finding great success in his career how to trade option in nifty has returned to train others in the art of trading.

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Nicolle has how to trade option in nifty trading everything that moves since she first started learning about the financial markets through Share Direct in She now leads hundreds of others towards financial independence through our guided Mentorship Programmes.

Hello Johann, I just want to say thank you for guiding us to how to make money on the Forex Market.

I had yrade bad experience some years ago when I tried to trade shares and I lost 35K so I was not sure I will ever make it in the market. Seller of call option has to pay margin money to create position. In addition forex charts real time this, you have to maintain a minimum amount in your account to meet exchange requirements.

Margin requirements are often measured as a percentage of the how to trade option in nifty value of your open positions.

Getting acquainted with options trading

Let us look at the margin payments when you are buyer and a seller:. Remember, while the buyer of an option has a liability that is limited to the premium he must pay, the seller has a limited gain. However, his potential losses are unlimited.

The margins are levied on the contract value and the amount in percentage terms that the seller has to deposit is dictated by the exchange. It is largely dependent on the volatility in the price of the option.

Higher the volatility, greater is the margin requirement. So, the seller of a call option of Reliance at a strike price ofwho receives a premium of Rs 10 per share would have to deposit a margin of Rs 1,16, How to settle a Call Option: When you sell or purchase an options, you can either exit your position before the expiry date, through an offsetting trade in the market, or how to trade option in nifty your position open until the option expires.

Subsequently, the clearing house settles the trade. Such options are called European style options.

Let us look at how to settle a call option depending on whether you are a buyer or a seller. There are two ways to settle — squaring off and physical settlement.

how to trade option in nifty If you decide to square off your position before the expiry of the contract, you will have to sell the same number of call options that you have purchased, of the same underlying stock and maturity date and strike price.

When you square off your position by selling your options in the market, as the seller of an option, you will earn a premium. The difference between the premium at which you bought the options and the premium at which you sold optoon will be your profit or loss.


Some also choose to buy a put option of the same underlying asset and expiry date to nullify their call options. The downside to this option is that deere stock options have how to trade option in nifty pay a premium to the put option writer. Selling your call option is a better option as you hoow at least be paid a premium by the buyer.

Tradd you forexbrokerinc account types sold call options and want to square off your position, you will have to buy back the same number of call options that you have written. These must be identical in terms of the underlying scrip and maturity date and strike price to the ones that you have sold.

In this section, we understood the basics of Options contracts. Frade the next part, we go into details about Call options and Put options.

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What are How to trade option in nifty Options: Here are some key features of the call option: You will also have to specify how much you are ready to pay for the call option. The strike price for a call option is the fixed amount at which you agree to buy the underlying assets in the future. It is also known as the exercise price.

When you buy the call option, you must pay the option writer a premium. This is first paid to the exchange, which then passes it on to the option seller. You sell call options by paying an initial margin, and not the entire sum.

Five Mistakes to Avoid When Trading Options

However, once you have paid the margin, you also have to maintain a minimum amount in your trading account or with your broker. For a buyer of a call option: For the seller of a call option: Previous Chapter Next Chapter.

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Description:Oct 18, - Options are the most versatile trading instrument ever invented. Since options cost less than stock, they provide a high leverage approach to.

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