Part 12 Trading Master Class

Call Options

A call option benefits the buyer when the price of the underlying asset goes up.
For example, if a stock is trading at ₹100 and you buy a call option with strike price ₹105, you expect the price to rise above ₹105 before expiry. If the stock goes to ₹120, you can buy it at ₹105 and profit from the difference (minus premium). If it stays below ₹105, your loss is limited only to the premium paid.

Put Options

A put option benefits the buyer when the price of the underlying asset goes down.
If a stock trades at ₹100 and you buy a put with a strike price of ₹95, you expect it to fall. If the stock goes to ₹80, you can sell at ₹95 and keep the difference as profit. If price stays above ₹95, your maximum loss is only the premium.