First of all would like to thank all of you who have contributed to my learning of Option Basics and hope that in future also new learners like me get a helping hand in understanding the intracacies of the stock market and derivatives.
My learning of Options Basics has prompted me study more and am still studing the various Option Strategies. While on the search for learning material of Option Trading, i came across NSE Website where Option Method is explained clearly in terms of examples and various Option Strategies. I am attaching the same for new learners who wants to understand Options Basics.
As you know, the more you learn, there is at some point, some terms confusing to a new learner even if it is explained in simple terms, hence would request Seniors to please explain to me the following:
1)
In Call, normally there is a Buy Call and a Sell Call. In this if I buy a Call(when i think the market is going to go up) then profit is unlimited and loss is only the premium. Whereas in Call if I sell a Call, then the profit is limited while loss is unlimited.
Please advise whether my calculation is correct or wrong.
2)
In Put, normally there is a Buy Put and a Sell Put. In this if I buy a Put(when I think the market is going to go down) then profit is unlimited and loss is only the premium. Whereas in Put if I sell a Put, then the profit is limited while loss is unlimited.
Also, would request if the above calculation is correct or wrong.
Thanks,
My learning of Options Basics has prompted me study more and am still studing the various Option Strategies. While on the search for learning material of Option Trading, i came across NSE Website where Option Method is explained clearly in terms of examples and various Option Strategies. I am attaching the same for new learners who wants to understand Options Basics.
As you know, the more you learn, there is at some point, some terms confusing to a new learner even if it is explained in simple terms, hence would request Seniors to please explain to me the following:
1)
In Call, normally there is a Buy Call and a Sell Call. In this if I buy a Call(when i think the market is going to go up) then profit is unlimited and loss is only the premium. Whereas in Call if I sell a Call, then the profit is limited while loss is unlimited.
Please advise whether my calculation is correct or wrong.
2)
In Put, normally there is a Buy Put and a Sell Put. In this if I buy a Put(when I think the market is going to go down) then profit is unlimited and loss is only the premium. Whereas in Put if I sell a Put, then the profit is limited while loss is unlimited.
Also, would request if the above calculation is correct or wrong.
Thanks,