Part 1 Support and Resistance

How Option Contracts Work

Every option has three basic components:

1. Strike Price

The fixed price at which you can buy (call) or sell (put) the asset.

2. Expiry Date

The date when the option contract ends. In India:

Index options: weekly & monthly expiry

Stock options: monthly expiry (with recent additions of weekly expiries)

3. Premium

The price you pay (or receive) to buy (or sell) the option.
Premium depends on:

Current price of underlying

Time left to expiry (time decay)

Volatility

Demand & supply