Part 3 Learn Institutional Trading

How Option Trading Works

When you trade options, you’re speculating on how the price of the underlying asset will move within a specific time frame. Here’s how it works for both types of options:

a) Call Option Example

Suppose Reliance stock is trading at ₹2,500. You buy a Call Option with a strike price of ₹2,520, paying a premium of ₹20.

b) Put Option Example

You buy a Put Option on Reliance with a strike price of ₹2,480 and pay a ₹15 premium.