Options Basics

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Option sellers take disproportionately higher risk than option buyers.

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The answer is “Option sellers“

Option sellers take disproportionately higher risk than option buyers.

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Put option should be bought when you are expecting the underlying stock or index to fall from the current levels.

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The correct answer is “Buy a put option“

Put option should be bought when you are expecting the underlying stock or index to fall from the current levels.

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ATM (At the Money) options have much better liquidity than far in the money or far out of money options.

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ATM (At the Money) options have much better liquidity than far in the money or far out of money options.

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NIFTY is by far the most actively traded script in the Indian stock market.

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NIFTY is by far the most actively traded script in the Indian stock market.

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The answer is “False”

The value of options that expire out of money or at the money becomes zero but the ITM options do not.

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The correct answer is “False”

The value of options that expire out of money or at the money becomes zero but the ITM options do not.

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Typically, it’s Thursday but if Thursday happens to be a holiday, the expiry day is moved back to the previous working day.

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The answer is “Thursday”

Typically, it’s Thursday but if Thursday happens to be a holiday, the expiry day is moved back to the previous working day.

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The answer is “Extrinsic value”

Please read through option pricing basics to understand these concepts.

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The correct answer is “Extrinsic value”

Please read through option pricing basics to understand these concepts.

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The answer is “False”

one of the reasons why options are so popular is because it’s extremely cheap to trade in options. However, that doesn’t mean that you should do that without understanding how they really work.

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The correct answer is “False”

one of the reasons why options are so popular is because it’s extremely cheap to trade in options. However, that doesn’t mean that you should do that without understanding how they really work.

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The answer is “Nifty options”

Nifty options are cash settled whereas most of the stock options are settled by physical delivery.

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The correct answer is “Nifty options”

Nifty options are cash settled whereas most of the stock options are settled by physical delivery.

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The answer is “Options”

This is the beauty of option strategies – you can make money even the underlying stock doesn’t go up or down.

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The correct answer is “Options”

This is the beauty of option strategies – you can make money even the underlying stock doesn’t go up or down.