Options
What will happen to my Intraday position if the stock hits the circuit limit?
Equity Intraday trading lets you leverage your positions—buying or selling stocks up to five times your account balance. However, these positions must be squared off on the same day. If they aren't, we aim to close them around 3.15 PM. Occasionally, ...
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 will happen if I don't square off my Options contract on the expiry day?
If you overlook squaring off your options positions on the expiry day, the position will settle based on the exchange's determined price. The difference between the settlement and your entry prices will reflect in your trading account ledger. ...
What is Open Interest and are there any limits set by FYERS?
Open Interest (OI) refers to the number of active Derivatives contracts in the market at a given time. It serves as a critical gauge of liquidity and can provide insights into potential price shifts, equipping you with valuable decision-making ...
Can I place market orders for commodity options on FYERS?
At FYERS, placing market orders in the MCX Options segment isn't feasible. Given that commodity derivatives, especially Options, witness low trading volumes in India, many of these options contracts are illiquid. Permitting market orders can ...
How to efficiently square-off order-level hedge positions?
While squaring off your hedge position you are required to close the Sell order first of the option before squaring off the Buy order. When dealing with hedged positions such as a Bull Put Spread, it is vital to square off orders in a manner that ...
What are Options, Premium, and the Strike Price?
An option is a contract that provides the buyer with the right (but not the obligation) to either buy (in the case of a call option) or sell (in the case of a put option) an underlying asset. This transaction takes place at a predetermined price ...
How is options trading different from trading futures?
While both options and futures are derivative instruments and play key roles in hedging and speculation, they have distinct characteristics: Commitment: In futures trading, both parties have an obligation to fulfill the contract. But in options, only ...
What is a call option?
A Call Option is a derivative contract that gives the buyer the right (but not the obligation) to purchase an underlying asset at a predetermined price by a certain date. Effects of Buying a Call Option: By buying, you secure the right to purchase ...
What is a put option?
A Put Option is a derivative contract granting the buyer of the contract the right, but not the obligation, to sell a specified amount of an underlying asset at a set price (strike price) within a set timeframe. Effects of Buying a Put Option: When ...
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 ...
How is the margin for buying and selling options determined in the stock market?
For buying either calls or puts, the margin requirement is equivalent to the premium. Margin for buying options = Premium x Total Quantity The option seller, facing a higher risk, has an increased margin requirement. The exchange determines this ...
Can an option buyer exercise their right any time during the contract's duration?
No, the option buyer is only able to exercise their right upon the contract's expiry. For instance, Ms. Mehta acquires a put option for Bajaj Auto with a ₹3,000 strike price, set to expire in three months. Even if Bajaj Auto shares drop to ₹2,900 ...
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 ...
How can I exercise my options at expiry, and how is P&L calculated?
All In-The-Money (ITM) options are typically auto-exercised by the exchange at contract expiry. The Profit or Loss (P&L) from exercising an option is calculated as the difference between the exercise settlement price and the option's strike price, ...
What is the Intrinsic Value?
The intrinsic value represents the built-in value of an option. It's computed as the difference between the underlying asset's current market price and the option's strike price. Notably, only In-The-Money options possess intrinsic value. For ...
Can only a portion of the options contract be exercised?
The exchange exercises options in their entirety. Partial exercise isn't an option. for instance, if you own an options contract for 100 shares, all 100 shares will be exercised together. You cannot choose to exercise only 50 of them.
What does assignment mean in options?
In options trading, "assignment" refers to the obligation of the option seller to fulfil the terms of the option contract. For call options, this means the seller will have to sell the underlying asset at the strike price. Conversely, for put ...
Does the seller of the option have control over assignment?
No. The process and decision of assignment are solely within the purview of the exchange. Option sellers do not have discretion in this matter.
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 ...
Does MTM settlement apply to options trading?
No, the Mark to Market (MTM) settlement process isn't applicable for options contracts. MTM settlement is exclusively used for futures contracts.
What are bull and bear spreads in options?
A Bull Spread is an options strategy set up for potential profit when the underlying asset's price is believed to rise. Conversely, a Bear Spread is designed to potentially profit when there's an anticipated decrease in the price. Consider Sarah, an ...
What's the difference between options debit and credit spreads?
In a Debit Spread, the investor experiences a net premium outflow by buying options at a higher price and selling options at a lower one. On the flip side, a Credit Spread is marked by a net premium inflow, where the investor buys options for less ...
What is FYERS RMS policy for trading?
At FYERS, we believe in fostering a safe and efficient trading environment. As part of our commitment to safeguarding your interests, we have set forth a comprehensive Risk Management System (RMS) policy. Here's a breakdown: RMS Policy on Options ...
Is trading in Far OTM options possible on FYERS?
Yes, we offer a broad strike price range, enabling you to Buy/Sell Far Out of The Money (OTM) Options Contracts. Options Buying: Index Options: You can purchase OTM Options within a range of 20% from the Last Traded Price (LTP). Stock Options: ...
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How long does it take to process a withdrawal request?
Upon placing a withdrawal request with FYERS, here's what you need to know: Same-day Processing: If you make a request between 5:30 AM and 6:00 PM, we process it on the same day. However, if you have open commodity positions/orders in the MCX ...
What are the latest features in FYERS Web?
The latest TradingView library has been integrated on the FYERS Web and the following are the feature updates. New Features: 1. Icons have been provided for Exit positions, Fund Transfer, Basket Order, My Account, User Settings, Refresh Trading ...
What is GTT? Can I place a GTT order in FYERS?
Good Till Trigger (GTT) is an order type where you can set a Target or Stop-Loss, remaining valid for up to one year from its placement. In essence, you determine a price to Buy or Sell a particular scrip, and this order remains active until that ...
Are there Annual Maintenance Charges (AMC) at FYERS?
No, FYERS does not impose any Annual Maintenance Charges (AMC). However, it's essential to note that clients who opened their accounts between 1st April 2020 and 4th June 2021 were subjected to AMC charges until 30th September.
What is the FYERS 30 Day Challenge, and why was it discontinued?
To encourage discipline among traders, we introduced FYERS 30 Day Challenge. Essentially, if you are in net profits for a period of 30 trading days, the brokerage charges incurred during the period will be refunded up to a limit of ₹10,000 per ...