I am new to option trading and I have some confusion in the relationship between strike price and premium. Take this example of a stock and for simplicity we are only considering a long call buy option
Spot price = 200 rs
Strike price = 300,275,250,175,150,100,50
expiry= 20 days
Because 175 is near to spot price it will be our ATM. Delta would be higher for ITM and OTM but not for ATM
ATM=175
ITM= 150,100,50
OTM= 300,275,250
Question 1: Can we buy a call option at any of these strike price? else it should be greater than or less than spot price?
Question 2: If I buy a call option at ATM which is lesser than spot price and the spot moves to 210 or 185 what happens to the premium?
Question 3: What happens to premium if I i buy option contract's with extreme strke price(300,50) with 20 days to expire
Spot price = 200 rs
Strike price = 300,275,250,175,150,100,50
expiry= 20 days
Because 175 is near to spot price it will be our ATM. Delta would be higher for ITM and OTM but not for ATM
ATM=175
ITM= 150,100,50
OTM= 300,275,250
Question 1: Can we buy a call option at any of these strike price? else it should be greater than or less than spot price?
Question 2: If I buy a call option at ATM which is lesser than spot price and the spot moves to 210 or 185 what happens to the premium?
Question 3: What happens to premium if I i buy option contract's with extreme strke price(300,50) with 20 days to expire
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