Please help begginer

#1
Hi All,

I am new to options and I am bit confused, I hope seniors will help me with this.

1. If I am buying a, say nifty call at 5100, does that mean that I am betting nifty will come down to that level?
2. If I am buying a, say nifty put at 5200, does that mean that I am betting that nifty will go up to that level?
3.how does shorting works here? is it the same as stocks?
4. Does brker give exposure to this too?

Thanks in advance
Nagesh
 
#2
no broker do not provide any exposure to do so.........since you are new to option trading means........stay away from short selling options.........

if you buy 5100 call means if nifty goes above 5100 you will be in profit.......
if you buy 5200 put means if nifty goes below 5200 you will be in profit...........



there are too many things about option like time value, time dekay.... you will find all these in traderji forums........................learn well before entering in trade
 
#3
all this is same for stoks suppose hdfc is trading at 2500 and i have baught hdfc 2500call



then if next day hdfc is trading at 3000 then i will be in huge profits.............remember there is time valu also......... same for puts
 

nac

Well-Known Member
#4
Hi All,
I am new to options and I am bit confused, I hope seniors will help me with this.
Nagesh
Better do paper trade before doing with your real capital
I have never traded in options, but still i share what i know.
1. If I am buying a, say nifty call at 5100, does that mean that I am betting nifty will come down to that level?
Nagesh
Means, your speculation should be nifty will reach 5100 and/or go/stay above 5100.
2. If I am buying a, say nifty put at 5200, does that mean that I am betting that nifty will go up to that level?
Nagesh
Means, nifty will reach 5200 and/or go/stay below 5200
3.how does shorting works here? is it the same as stocks?
Nagesh
Shorting needs margin as of futures. Better stay away till you get some knowledge in options. You can try this after you feel confident and successful in option trading.
4. Does brker give exposure to this too?
Nagesh
Upto my knowledge, No broker would give exposure even if you do day trade in options.
 

AW10

Well-Known Member
#6
Hi All,

I am new to options and I am bit confused, I hope seniors will help me with this.

1. If I am buying a, say nifty call at 5100, does that mean that I am betting nifty will come down to that level?
2. If I am buying a, say nifty put at 5200, does that mean that I am betting that nifty will go up to that level?
3.how does shorting works here? is it the same as stocks?
4. Does brker give exposure to this too?

Thanks in advance
Nagesh
Basics of option pricing is
1) All Calls increase in value when underlying goes up
2) All Puts increase in value when underlying falls..

There are exceptions when above rules will not work (but lets skip them for the time being). As a novice, it is safe to digest the basic rules first.

So whether u buy 5000/5100/5300/ 5400 call, they all will go in value as nifty goes up.
Only difference will be the amount by which they go up. 5000 call may go up by 70 paise for each point move, whereas 5400 call may just move by 30 paise.

If you are planning to hold the 5100 call till expiry then even if nifty goes above 5100, you may be in loss.. Cause you have paid some money to buy this call (say u paid 60 rs for this). So nifty has to close above 5100+60 = 5160 for you to see any profit.

hope this clarifies your basic doubt.

Happy Trading
 
#7
Hi All,

Yes I am clear with my Basics, thanks to all the members who posted and speacial thanks to AW10 for a detailed answer. I will try and be here for more time to understand option trading as I find this very helpful.

Thanks
Nagesh
 

Similar threads