Doubts on Options trading

F&O
1

This question might be so silly, but I’m a beginner. So you need to answer me :slight_smile:

“Say I buy 1 lot (75 quantity) of nifty 16000 CE”

  • It might take a week or so to go above 16000. So before that will I loose all the money
    (When nifty is under 16000)

  • What will be my profit if nifty goes to 16200m (with 1 lot) ? I don’t know how to calculate :frowning:

  • What will be the minimum capital required for option buying ?
    Will I be able to buy 1 lot of some stock with 10,000 rs ? ( mention minimum capital in which
    most options are affordable to buy ). I need to know this.

Thanks in advance ( If you answer my questions)

2

Before expiry Option prices will fluctuate according to movement in underlying. Also, as the expiry day nears, Options start to lose value. This module on Varsity explains Options in detail:

Upon expiry, if Nifty closes below 16000, your Option will expire worthless and you’ll lose the entire premium paid.

If Nifty expires at 16200, your 16000 CE will expire with intrinsic value of Rs. 200. The difference between your buy price and settlement price ie. Rs. 200 will be your P&L.

It depends on Option premium.

Before you start trading Options, would suggest you go through the module shared above :slightly_smiling_face:

1 Like
3

Thanks for your professional reply and I’m also reading varsity.

4

Will the P&L be 200*75 = 15000 ?
Am I wrong ?

5

You are right.

1 Like
6

Thanks