i m trading in only cash segement , i don’t know call/put option trade or f n o trade, so guide me
If one has no idea what an option is, one should not be trading them.
I would start learning about options here for FREE from people whop having to sell you.
http://www.optionseducation.org
http://www.optionseducation.org/classes/
If you give money for call you think underlying going up. If you give money for put you think u/lying going down. Giving money for an option (the premium) is like buying. If you take money for the call you think u/lying going down. If you take money for put you think u/lying going up. Taking money is like selling (to open) and also called writing an option.
Easy, see, only four possible ways of trading!!
References :
http://www.shareworld.co.uk
A call option means you have the right to buy ["call away from"] a stock @ a certain price before a certain date. For instance:
XYZ stock is now trading @ $38/share
You buy a November 40 @ $1.00. $40 is called the strike price.
You have the right to buy 100 shares of XYZ anytime between now and the 3rd Friday in November at $40 share. Why would you do this?
If XYZ rises to $42 the first week of Nov it has to be worth at least $2 – $42-$40 [strike price]. You can then sell the option @ $2. You only paid $1 for it so you doubled your money.
If XYZ collapes to $30 just after you bought it, it will expire worthless in Nov. which means you lost all your money.
A put is the right to sell a stock at a certain price over an amount of time. See the link below for a fuller explanation.
References :
http://www.forbes.com/2006/08/23/investools-options-ge-in_wh_0823investools_inl.html
With a call, you pay a fixed amount and gain the right to collect the amount of the gain (if any) in the underlying stock. With a put, you pay a fixed amount and gain the right to collect the amount of the loss (if any).
How do you know you want to trade these if you don’t know what they are.
References :
for put and calls you need to know first f&o ,if you know that it would be very easy to trade. put and calls were introduced to make risk limited….lets say a future is trading at 100rs and you view on stock is 110 in near term….you will buy call of 110rs around 1re and as share trades above 110 your value of call will automatically increase but if it’s fails to touch 110 then your 1re will vanished….in case of bearish market you are expected to fall same stock at 90rs ,now you will put of 90rs…and as the share falls put price increses…..for more details mail me star_aqs@yahoo.co.in ……this above was only therotical prices…..actual differs
References :
If one has no idea what an option is, one should not be trading them.
I would start learning about options here for FREE from people whop having to sell you.
http://www.optionseducation.org
http://www.optionseducation.org/classes/
References :
— Finance & Risk Management Consultant
— Fmr Registered Options Principle
— 20 years in the markets / 19 years options experience (add me to view post history)
hi there !!
first of all, Option is a right but not an obligation to buy or sell any asset or currency at future date or future price.
Call option is right to buy
and put option is right to sell..
Options are usefull to cover our risks and hedge our trades…
References :
gnutrade: trading terminology