Options Kya Hota Hai?

Overview

An option is a contract that gives you the right, but not the obligation, to buy or sell an asset at a fixed price before a set date. A call is the right to buy, a put is the right to sell. You pay a premium for that right, and for a buyer the premium is the most you can lose.

Key takeaways

• A call is the right to buy, a put is the right to sell, at a fixed strike price.
• The buyer pays a premium, and that premium is the buyer’s maximum loss.
• Every option has an expiry date, unlike shares you can hold forever.
• One contract covers a fixed lot size set by the exchange.

For education only. Not investment advice.