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Options trading is a type of derivative trading where its price is intrinsically linked to an underlying stock. A stock buyer holds the right, but not the obligation, to buy/sell 100 shares of a stock at a premium from/to a seller within a fixed time period.

Options Anatomy

Strike Price

Strike price is also also known as exercise – the price at which the underlying stock can be bought or sold. Once again, options trading is contracts based and hence, a buyer or seller should be well aware of the contract expiry date. Please note that, in India, options expire on the last Thursday of every month.

Premium

Premium is the price an options buyer pays to a seller to reserve the rights to sell the underlying at the strike price before the contract expires. The same holds true for the relationship between sellers and buyers.

 

Month of Expiry

The option contract will expire on the last Thursday of the said month. Before the expiry ends, buyers and sellers are required to settle their contracts.

 

Underlying Asset

The underlying asset of an option can be anything from stocks to currency to commodity. The price of an option is intrinscally derived from the price of its underlying asset.

At Zebu, we provide you with a single margin to trade with both currency, one of the very few brokerage firms to allow traders to do so. With a powerful trading tool and low brokerage, Zebu can be your partner in trading!

Member name : Zebu Share and Wealth Managements Pvt Ltd
NSE / BSE / MCX , SEBI Registration No: INZ000174634
CDSL : 12080400
AMFI ARN : 113118
Research Analyst : INH200006044

Head office:
No 127, 1st floor ,PSK Booshanam Mahal ,100 feet Bypass Road, Velachery, Chennai 600 042.
Phone : +91-44 4855 7991

Assist: assist@zebuetrade.com
Investor grievance: grievance@zebuetrade.com
The following advice is issued in the interest of investors:
Safeguard your account from unauthorized transactions. Update your mobile numbers/email IDs with your stock brokers. Get all information related to your transactions directly from the stock exchanges on your mobile phone/email id, at the end of every day. KYC compliance is mandatory when you enter the securities market. It is a one-time exercise done through a SEBI-registered intermediary (stockbroker, depository participant, mutual fund, etc). There is no need to repeat the KYC process when you go to any other intermediary.

You do not have to issue a cheque while subscribing to an IPO. Write your bank account number clearly on the IPO application and sign it, sanctioning your bank to make payments when there is an allotment. Your funds will remain in your bank account in the case of non-allotment.