Intrinsic Value and Time Value of a CALL Option
A call option is the right to buy an underlying asset without the obligation to buy. The seller of the call option has an obligation to sell at the agreed…
Introduction to Moneyness
Moneyness is the relative position of the price of an underlying asset (i.e. stock) with respect to the strike price of the derivative, most commonly as a call option or…
When Should You SELL a PUT Option?
For an investor to yield a profit, the price of the security has to increase before its exercise date as opposed to a put buyer whose outlook is bearish. The…
When Should You BUY a PUT Option?
For an investor to yield a profit, the price of the security has to decrease before its exercise date. Buying a put option grants the rights to sell the security…
Weekly Options and Monthly Options
Nifty option contracts: Thursday (Every week, Last of the month) Fin Nifty option contracts: Tuesday (Every week, Last of the month) Bank nifty option contracts: Wednesday (Every week, Last of…
When Should You SELL a CALL Option?
An investor should sell a call option if there is a possibility that the price of the security may plummet. The premium amount can be recovered if the asset’s price…
When Should You BUY a CALL Option?
For an investor to yield a profit, the price of the security has to increase before its exercise date. When there is indeed a rise in the value of a…