Part 3 Learn Institutional Trading

Call Options & Put Options Explained

Options are of two types:

🔹 Call Option

Gives the right to buy an asset at a fixed price.

Buyers of call options are bullish (expect prices to rise).

👉 Example:
If Nifty is at 22,000 and you buy a 22,100 Call Option for ₹100 premium, you pay ₹100 × lot size (say 50) = ₹5,000.

If Nifty rises to 22,400, the 22,100 call is worth 300 points. Profit = (300 - 100) × 50 = ₹10,000.

If Nifty stays below 22,100, you lose only the premium ₹5,000.

🔹 Put Option

Gives the right to sell an asset at a fixed price.

Buyers of put options are bearish (expect prices to fall).

👉 Example:
If Bank Nifty is at 48,000 and you buy a 47,800 Put for ₹200 premium, lot size = 15.

If Bank Nifty falls to 47,000, option value = 800 points. Profit = (800 - 200) × 15 = ₹9,000.

If Bank Nifty stays above 47,800, you lose only premium = ₹3,000.

So:

Call = Bullish bet.

Put = Bearish bet.