Part 1 Ride The Big Moves

Call and Put Options in Action
Call Option Example

Reliance is trading at ₹2500.

You buy a 1-month call option with strike price ₹2550, premium ₹50, lot size 505.

If Reliance rises to ₹2700 → Profit = (2700 - 2550 - 50) × 505 = ₹50,500.

If Reliance falls below 2550 → You lose only the premium (₹25,250).

Put Option Example

Nifty is at 20,000.

You buy a 1-month put option, strike 19,800, premium 100, lot size 50.

If Nifty falls to 19,200 → Profit = (19,800 - 19,200 - 100) × 50 = ₹25,000.

If Nifty rises above 19,800 → You lose premium (₹5,000).

Participants in Options Trading

Option Buyer – Pays premium, has limited risk and unlimited profit potential.

Option Seller (Writer) – Receives premium, has limited profit and potentially unlimited risk.

Example:

Buyer of call: Unlimited upside, limited loss (premium).

Seller of call: Limited profit (premium), unlimited loss if stock rises.