What Is Option Trading | What is Call and Put in Option Trading

 Do you not know what is option trading in share market and how option trading works, Today we are going to tell you about what is option trading, We will also tell you about  What is Call and Put in Option Trading so that you Know better what is Option Trading.

What Is Option Trading? A Beginner's Guide - Option Trading

Learn what is option trading

What is Option Trading:- 

You must have come to know from the name itself that Option means option. For example- Suppose you take an option to buy 1000 shares of a company for 1$ after 1 month by paying 100$ premium. In such a situation, the share of that company becomes $ 0.70 after 1 month, then you will have the option not to buy that share at a loss. In this case your premium money will be lost.

Your loss in option trading is as much as you paid premium but here you get unlimited profit and this is option trading.

What is Call and Put in Option Trading

What is Call and put in Option Trading:-

There are two types of options in option trading, perhaps that is why it is called option trading. In option trading, you get two types of options, one is call and one option is put to trade. Let us know what is the difference between the two.

What is Call Option in Option Trading

In options trading, if you buy shares and the price of the traded stock above the call price increases from the bought price, then you make a profit.

What is Put Option in Option Trading

In option trading, if you buy shares and put money on the put option, then if the price of the share falls below the price of the purchased share, then you will get profit.

I Hope know you are able to understand what is Option Trading and what is Call and Put Option in Option Trade. Let,s Move on to Next Points.

When Is The Expiry Of Option Trading

There are two types of expiry in options trading. One is in a week and one is in a month. Nifty 50 and Bank Nifty expire on every Thursday in the weekly expiry. The expiry of the stock is the last Thursday in the month which is listed in share option trading.

Hope you have understood by now what is option trading and what is call and put option in option trading. Along with this, we also told when option trading expires. Let us now know when there can be more losses in option trading.

When can there be high losses in options trading?

In option trading, those who buy calls or puts have to bear the loss of premium only. But those who sell the call and put, their loss is unlimited. Only very big traders sell calls or puts because they have knowledge as well as money.

How To Trade With Option Trading?

To do option trading, you cannot buy 1 share of a company, you have to buy it in LOT. A lot of Nifty50 is 75 but there are more in the stock. To buy any share and option of Nifty50, Bank NIfty, you have to go to your Demat Account. After that, whatever you want to buy, you will get to see Option Chain, you can buy Call or Put whatever you want to buy from it.

In our opinion should you trade options?

As you know, in option trading, your loss is fixed, so if you have the money to bear the loss, then you can trade in options. Never trade with incomplete knowledge from the Internet, it can cause you a lot of loss. Before investing in any trade, know about it completely. And trade only when you are able to bear the losses.

We hope that from the information given by us, you will be able to know what is option trading and how it works, if you have any problem related to option trading, then definitely tell us in the comment, we will reply to your comment soon. See you in the next article, with more information about trading, keep trading till then.

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