NIFTY Option Chain

The lot size of the Nifty Option Chain is 50 shares. It has been standardized by the National Stock Exchange of India.

Yes, you can succeed in options trading if you have a strong understanding of risk management and market analysis. Implementing the right strategies is key to increasing profitability.

Nifty 50 ATM is the nearest strike price available to the current market price of the Nifty 50 index. It marks the point where the intrinsic value transitions between OTM (out of the money) and ITM (in the money).

ITM strikes for Nifty 50 are strike prices below the current index level for call options and above the index level for put options. These options have intrinsic value and are more likely to be exercised.

OTM strikes for Nifty 50 are strike prices above the index for call options and below the index for put options. These options do not have intrinsic value and typically carry lower premiums.

A call option gives the buyer the right (but not the obligation) to buy an asset at a predetermined price on a future date. For example, if the option allows buying Reliance shares for Rs 100 and the market price rises to Rs 110, the buyer benefits. The buyer pays a premium to the seller for this right.

A put option gives the buyer the right (but not the obligation) to sell an asset at a predetermined price on a future date. If the asset’s market price drops below the agreed price, the buyer can sell it at a higher price, making a profit. The buyer pays a premium for this right.

European options can only be exercised on the expiration date, while American options can be exercised any time up to the expiration date.

A futures contract is an agreement between two parties to buy or sell an asset at a predetermined price on a specific future date. Both parties are obligated to fulfill the contract terms regardless of market conditions.

A forward contract is similar to a futures contract but is a private agreement between two parties without the involvement of an exchange. It carries credit risk as there’s no intermediary to guarantee performance.

The 5% stock rule advises that no more than 5% of your investment portfolio should be allocated to a single asset. It aims to reduce risk by encouraging diversification.

Yes, options can be riskier due to their complexity. Buying options limits your risk to the premium paid, but selling options can carry higher risks and margin requirements. Understanding the product is essential before trading.

A covered option strategy involves owning the underlying asset while selling a call option on it. For example, if you own Reliance stock and sell a call option on it, it’s a covered call strategy that limits downside risk and allows earning premiums.