Related Articles
When does the buyer & seller of a call option benefit in the stock market?
The buyer of the call option benefits when the underlying asset's price is above the strike price at the contract's expiry. Conversely, the seller gains when the price remains below the strike price at expiry. For instance, Mr. Verma buys a call ...
What is the moneyness of an option?
Moneyness describes the relationship between the option's strike price and the current market price of the underlying asset. It helps traders gauge the potential profitability of an option. The three primary categories of moneyness are In-The-Money ...
Is the buyer of an option subjected to Physical Settlement?
In short, Yes! SEBI guidelines stipulate that all In The Money (ITM) stock options contracts undergo physical settlement, regardless of the buyer or seller status. For the Call Option Buyer: Mr. Man, a FYERS client, acquired one lot of Tata Motors ...
What is Periodic Call Auction?
Periodic call auctions are mechanisms specifically designed for trading illiquid stocks. These stocks typically experience low trading volumes, making their prices less influenced by regular supply and demand dynamics. Criteria for Illiquidity: ...
What is an options spread and what are the types of spreads?
An options spread is a strategy that involves taking multiple positions on options contracts, typically by buying and selling options of the same underlying security but with different strike prices and/or expiration dates. The main types of spreads ...