what is option "EXERCISE" means?

G

GOMZO

Member
#1
#1
hi,

suppose i buy a nifty one lot call option . so buying a call or put option is the meaning of EXERCISE?

option is right to buy not obligation means what actually ?
suppose i buy a nifty call option so what is the obligation here ?

please clarify both the above meaning.


thanks...
 
V

vijayvaliya

Active Member
#2
#2
GOMZO said:
hi,

suppose i buy a nifty one lot call option . so buying a call or put option is the meaning of EXERCISE?

option is right to buy not obligation means what actually ?
suppose i buy a nifty call option so what is the obligation here ?

please clarify both the above meaning.


thanks...
Click to expand...
when you have an option, you may chose to opt, or you may not chose to opt. if you chose to opt for the buy, you are excercising your option. (generally u will do it, only when the price is in your favour).

if you buy a nifty call, you have no obligation, but the seller has the obligation to sell at the specified price. (in case you chose to excercise your option)
 
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