There is only one price at which you can buy or sell a stock, right? But, with an option, you literally have ‘options’ because you can choose from a range of strike prices. But a strike price is not what you pay to buy an option. Confused? Read about strike prices here.
In-the-money, out-the-money..tempted to ask where is the money? We get you. Read this to know all about ‘moneyness’. So you are always ‘on the money!’
Ever wondered what is this ‘market sentiment’ pro traders keep talking about? Read this chapter on Open Interest and you will also know how to ‘read’ the market.
So you can identify today’s market sentiment. But, what is the long term mood of the market? Are traders pessimistic or not? That secret lies locked in the put call ratio. Read all about it here.
Did you know you can identify the strike price where you will make maximum losses as an Options Buyer? That is the point of Max Pain. Read all about it here…
So you know that an Option gives you the right, but you are not obliged to buy or sell an underlying security, correct? Then what happens on expiry day? Do you have to buy or sell? What if you don’t? We answer all your questions in this chapter.
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