Option trading

Option Strategy: Bull Put Spread

When Option trader thinks that the underlying stock price goes up moderately in near term. It is implemented by selling higher striking in-the-money put option and buying a lower striking out-of-the-money put option on the same underlying stock with the same expiration date.   Maximum profit achieved when the price of underlying is greater than or equal to the strike price of the short put. Maximum loss occurs when the price of underlying is less than or equal to the strike price of the long put.
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Option Strategy: Long Call ; Buying call

This is most basic option strategy for traders who are new in Option trading. This strategy is also known as Buying call strategy. I this strategy the downside risk is limited. When traders are bullish about the prospects for a stock/index, buying call can be an excellent way to capture the upside potential with limited downside risk. For example, Nifty is currently trading at 8285.15 with 0.12% gain, We are bullish on Nifty. We buy Call Option with a strike price of Rs 8300 at a premium of Rs 60.00 expiring on 29 October 2015. if Nifty goes above 8360.00(strike price + Premium price), we w...
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