OPTIONS SUMMARY
By Jaynesh Kasliwal
NOTE
In all my charts
Red line is 21 ema
Green line is 50 ema
MACD as normal settings
BASICS OF OPTIONS
PE : Put Option
Buying when View is Bearish
Selling when View is Bullish
CE : Call Option
Buying when View is Bullish
Selling when View is Bearish
Time is Friend while selling Options
Momentum in right direction is Friend while
buying Options
OPTIONS GREEKS SIMPLIFIED
1. Delta Delta measures how much an option's
price can be expected to move for every 1 Rs
change in the price of the underlying security or
index .
If Delta Is 0.5 then if Stock Moves 1 Rs Option
Will move 0.5 Rs Nearer the Option More the
delta.
2. GAMMA
Gamma is the rate of change for an option's
delta.
Gamma is at its highest when an option nearest
and is at its lowest when it is further away from
strike
If gamma Increases the price of option will
change very fast as it boosts delta .
3. THETA
Options don't Move linearly
The term theta refers to the rate of decline in the
value of an option due to the passage of time.
Theta is generally expressed as a negative
number and can be thought of as the amount by
which an option's Value will reduce.
ITM Options (In the money options)
a) A call option is said to be in ITM if the strike
price is less than the current spot price of the
security.
I.e. Spot- Strike > 0
b) A put option is said to be ITM if the strike
price is more than the current spot price of the
security.
I.e. Spot- Strike < 0
ATM Options (At the money options)
a) A call option is said to be in ATM if the strike
price is equal to the current spot price of the
security.
I.e. Spot- Strike = 0
b) A put option is said to be ATM if the strike
price is equal to the current spot price of the
security.
I.e. Spot- Strike = 0
OTM options (Out of the money options)
a) A call option is said to be in OTM if the strike
price is more than the current spot price of the
security.
I.e. Spot- Strike < 0
b) A put option is said to be OTM if the strike
price is less to the current spot price of the
security.
I.e. Spot- Strike > 0
LONG ON OPTION
Long on option Buyer of an option is said to be
“long on option”
You have the right to exercise that option.
Your potential loss is limited to the premium
amount you paid
Profit depends on the level of underlying asset
price at the time of exercise/expiry of the contract
SHORT ON OPTION
Short on option Seller of an option is said to be
“short on option”
Your maximum profit is the premium received.
You can be assigned an exercised option any time
during the life of option contract .
Your potential loss is theoretically unlimited
OPTIONS PRICING
There are five fundamental parameters on which
the option price depends:
1) Spot price of the underlying asset
2) Strike price of the option
) Volatility of the underlying asset’s price
4) Time to expiration
5) Interest rates
OPTIONS VALUES
LINKS FOR VARIOUS GROUPS
OPTIONS BASIC CLASS OF 2 HOURS :
[Link]
7a9d0ed13c8fc0
For Paid Calls , Swing Trading Strategy and
additional Services please dm :[Link]/mzh9un