New to Options Trading.... Need little help

[craige]

One of the best books on Options (atleast according to my reading experience0 is
Options Essential Concepts and Trading Strategies, 2nd Edition

You can download it from the link below
https://sites.google.com/site/phsknmbooks/home/books

Thanks a lot for the books, i have read a little & it really explains in detail.
Let me give you fresh example:
Current Spot Nifty at 6000, I think nifty will go below 6000

1] So i have to "BUY" PE6000 @ 60.
Afterwards same day, I "SELL" PE6000 @ 75

So my profit, 75-60 = 15Rs. (Am i understanding right?)

2] Selling call or put, without 1st buying is known as "writing" and it carries unlimited risks. (have i understood this right?)

 

[trader15]

>>>>Current Spot Nifty at 6000, I think nifty will go below 6000

>>>1] So i have to "BUY" PE6000 @ 60. Afterwards same day, I "SELL" PE6000 >>>@ 75
>>>So my profit, 75-60 = 15Rs. (Am i understanding right?)

Yes. You have understood correctly. Taking short position by buying put option is safest bet for newbie in options.

>> 2] Selling call or put, without 1st buying is known as "writing" and it carries >> unlimited risks. (have i understood this right?)

Yes. Correct. And the margin requirements are higher. Consider it equivalent of
1 nifty future lot for selling.

Also your profit is limited to the premium you'll receive. You receive the premium for strike price and that is your only profit.

This strategy can be used for making profits by selling either higher OTM or deeper ITM options.