17-Sep-2021
What is Option Trading ?
1) Do you know which segment of the stock market has the highest turnover?
Equity market future market options market guess friends yes you are right you know it correctly option market is same as last 26 July we saw daily trading 61 thousand 528 crores in the cash market. The turnover of the same futures market was 1 lakh 50 thousand 882 crores while that of options market was 34 lakh 53 thousand 231 crores.
Here you can clearly see that the highest turnover is from the option market itself. Highest turnover i.e. largest market.
2) Do you know why most people prefer to trade in the options market?
Because to trade in equity and futures market you have to pay more money than options market.
While there is a similar amount of premium rate available in the options market, let us understand this with the example of a stock such as
The price of 1 share of State Bank of India is running at Rs 432 in the cash market.
If we buy 1500 qt shares of SBI in the cash market then we have to pay 6 to 6:30 lakhs
In the same futures market, the share price of 1500 quantity of SBI will be available in 2 to 2.5 lakh rupees.
On the other hand, 1500 quality shares of SBI are easily available in the options market at a premium rate of 5 to 10 thousand.
Now you must be thinking that why I took only 1500 quantity example because in F&O market shares are available in lots only.
3) Do you know that only a few rupees can be converted into lakhs of rupees in the options market (ie 100 can be made 100)
Because there are more opportunities in the options market, that is, in the options market, we trade at a premium rate, which gives us the opportunity to trade in more volume, hence the profit is also high in it.
Hello, friends, we promised that we are going to bring a series of options market, so today's is the first series. We have divided this series into three parts. 1) Fundamentals of Options Market - In which we will understand the basics of the options market. 2) Analysis of options market - In this section, we will analyze the options market in detail and 3) Option market strategy - in which we will explain various different strategies of the options market, so let's start with the fundamentals of the options market first video
Before understanding the options market, you have to understand the derivatives market a little because options are a kind of derivatives. We understand derivatives also with a simple example like milk is the main product, many products like curd cheese ghee are made from milk itself, so when the price of milk will increase or decrease it is clear that as the price of products made from it The quantity of Curd paneer will also increase or decrease card if we say it in market language, milk which is the main product will be called underline, while products made from it like Curd ghee will be called derivative. The product of this graph. milk derivative is
There are four types of derivative products.
1) Forward
2) future
3) Option
4) swap
1) What is a futures contract, where two parties are face-to-face or face-to-face in a contract, it is called a futures contract, but in this type of contract, there is a counterparty risk in which either of the two Those two-person If the person defaults, that contract ends there, to reduce this risk, considering its shortcoming, a new product was launched which we call future contract.
2) To reduce the shortfall of the forward contract, the futures contract was introduced in which a new entity was introduced which we call the stock exchange. This stock exchange is responsible for fulfilling the contract. In the futures market, there are both rights and obligations to buy and sell any underlying stock.
3) What is an option, in a futures contract, you have both rights and obligations, but if we see the same in options, you will have only rights, not obligations. Let us now understand the option through an example
There is a person who wants to buy a new mobile, Wow goes to the mobile shop and while talking to the shopkeeper says that I want a mobile of this specification. That shopkeeper tells him about the mobile according to his need, which costs ₹ 20000 but due to high demand and less supply, he is not able to deliver the mobile to that customer immediately. In this case, the shopkeeper gives an offer to the customer in which he says that you book this mobile, that means we make a contract in which you deposit me ₹ 1000 token amount after next 20 days when it The mobile will be in my shop, you will take this mobile by paying the rest. Through this agreement, the customer gets an option that he may or may not take the mobile in the future as he has the right but remembers the obligation or any other option.
Equity market future market options market guess friends yes you are right you know it correctly option market is same as last 26 July we saw daily trading 61 thousand 528 crores in the cash market. The turnover of the same futures market was 1 lakh 50 thousand 882 crores while that of options market was 34 lakh 53 thousand 231 crores.
Here you can clearly see that the highest turnover is from the option market itself. Highest turnover i.e. largest market.
2) Do you know why most people prefer to trade in the options market?
Because to trade in equity and futures market you have to pay more money than options market.
While there is a similar amount of premium rate available in the options market, let us understand this with the example of a stock such as
The price of 1 share of State Bank of India is running at Rs 432 in the cash market.
If we buy 1500 qt shares of SBI in the cash market then we have to pay 6 to 6:30 lakhs
In the same futures market, the share price of 1500 quantity of SBI will be available in 2 to 2.5 lakh rupees.
On the other hand, 1500 quality shares of SBI are easily available in the options market at a premium rate of 5 to 10 thousand.
Now you must be thinking that why I took only 1500 quantity example because in F&O market shares are available in lots only.
3) Do you know that only a few rupees can be converted into lakhs of rupees in the options market (ie 100 can be made 100)
Because there are more opportunities in the options market, that is, in the options market, we trade at a premium rate, which gives us the opportunity to trade in more volume, hence the profit is also high in it.
Hello, friends, we promised that we are going to bring a series of options market, so today's is the first series. We have divided this series into three parts. 1) Fundamentals of Options Market - In which we will understand the basics of the options market. 2) Analysis of options market - In this section, we will analyze the options market in detail and 3) Option market strategy - in which we will explain various different strategies of the options market, so let's start with the fundamentals of the options market first video
Before understanding the options market, you have to understand the derivatives market a little because options are a kind of derivatives. We understand derivatives also with a simple example like milk is the main product, many products like curd cheese ghee are made from milk itself, so when the price of milk will increase or decrease it is clear that as the price of products made from it The quantity of Curd paneer will also increase or decrease card if we say it in market language, milk which is the main product will be called underline, while products made from it like Curd ghee will be called derivative. The product of this graph. milk derivative is
There are four types of derivative products.
1) Forward
2) future
3) Option
4) swap
1) What is a futures contract, where two parties are face-to-face or face-to-face in a contract, it is called a futures contract, but in this type of contract, there is a counterparty risk in which either of the two Those two-person If the person defaults, that contract ends there, to reduce this risk, considering its shortcoming, a new product was launched which we call future contract.
2) To reduce the shortfall of the forward contract, the futures contract was introduced in which a new entity was introduced which we call the stock exchange. This stock exchange is responsible for fulfilling the contract. In the futures market, there are both rights and obligations to buy and sell any underlying stock.
3) What is an option, in a futures contract, you have both rights and obligations, but if we see the same in options, you will have only rights, not obligations. Let us now understand the option through an example
There is a person who wants to buy a new mobile, Wow goes to the mobile shop and while talking to the shopkeeper says that I want a mobile of this specification. That shopkeeper tells him about the mobile according to his need, which costs ₹ 20000 but due to high demand and less supply, he is not able to deliver the mobile to that customer immediately. In this case, the shopkeeper gives an offer to the customer in which he says that you book this mobile, that means we make a contract in which you deposit me ₹ 1000 token amount after next 20 days when it The mobile will be in my shop, you will take this mobile by paying the rest. Through this agreement, the customer gets an option that he may or may not take the mobile in the future as he has the right but remembers the obligation or any other option.