INTERODUCTION OF OPTION
THE BASIC CONCEPT OF OPTIONS
To understand the basics concept of options, lets start with a simplified look at how they work.
An equity option is linked to a specific stock.the price of the option is much less than the price of the underlying stock, which is a major reason for the attractivness of option. if the price of the stock changes the price of the option will also change, although by a smaller amount. as the price of a stock goes through its daily ups and downs, the price of an associated option will undergo related fluctuations.
The price of an option can be viewed and followed in much as the same ways as a stock price.there are numerous online services, including the data feed for your brokerage account that provide the prices of options. The chicago board of exchange and in india NSE offers a free online service for quotes on option prices.
For a call option, if the stock price goes up, the option price also increases. if the stock price goes down the price of call options decreases.
For a put option if the stock price goes down the put option price increases why put option price increases because we buy put option when we have a bearish view about to stock .if the stock price goes up the price of the put option decreases.
The price of an option can be viewed and followed in much as the same ways as a stock price.there are numerous online services, including the data feed for your brokerage account that provide the prices of options. The chicago board of exchange and in india NSE offers a free online service for quotes on option prices.
For a call option, if the stock price goes up, the option price also increases. if the stock price goes down the price of call options decreases.
For a put option if the stock price goes down the put option price increases why put option price increases because we buy put option when we have a bearish view about to stock .if the stock price goes up the price of the put option decreases.
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