Options7 min read
Options trading basics: what a call and a put actually are
A call is the right to buy, a put is the right to sell, and a premium is what that right costs. Here is what each side of an option contract is signing up for.
Options and futures
Deltaunderlying ke ek rupee move par option kitna hilega
An option Greek showing roughly how much the option's premium changes for a one-rupee move in the underlying price.
Delta measures how much an option's premium should change when the underlying moves by one rupee, or one point for Nifty. Call deltas run from 0 to 1, put deltas from 0 to minus 1. An at-the-money option has a delta near 0.5, a deep in-the-money option near 1, and a far out-of-the-money option near 0. If an SBI ₹820 call has a delta of 0.40 and SBI rises from ₹800 to ₹805, the premium should rise by about ₹2, other things equal. Delta also gives a rough sense of the market's implied probability that the option will finish in the money. Delta is not fixed; it changes as price and time move, and the rate of that change is called gamma. Beginners buying cheap options with delta 0.05 often wonder why a big move barely helps. Delta explains it.
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Options8 min read
Lot size, expiry and margin: the three things every F&O beginner gets wrong
One Nifty lot is not one unit. Expiry is not just a date. Margin is not the price. Get these three straight before your first F&O order.