Step 4: Select the underlying asset you chose to trade and also select the various strike prices that we choose to trade upon. Now, say we are looking to trade Nifty 50 Contract via Option and we have a bullish stance on the market. An In the Money Option is one that would make money if we were to exercise it right now at current spot levels.
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An Out of Money option is one that would be worthless if we were to expire it right now and an At the Money option is one that is the closest strike price to the current spot price levels. It is advised to not to go too out of money while buying an option as the chances of them expiring in the money by expiry, is very less and more often than not, they expire worthlessly. Then, the next step in this process is to place an order to buy the option. We can choose to buy the option at the existing price and we can also choose to place the order at a specified price by placing a limit order.
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- 'I would advise some caution for someone trading the Bank Nifty contract'.
Therefore, if you look at the ticket in the image above, we have two options to buy the contract from i. Market or Limit.
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If we choose the option of market order then the order is executed at the current market price. And if we choose Limit order, then we can choose the price at which we want to buy the contact. In the image above, the current rice of the contract call option is The total number of shares in one contract of nifty is And this information is directly available on the ticket shown above.
Step 6: The next step while trading options is to check in the order book if the order has been placed. We can do that by simply clicking on the orders tab and we can see the list of all the order which have been placed or canceled or executed. Step 7: The last but the most important step while trading options is to monitor the existing position in the market. This is how you trade options in India. If you still have any doubts, I will strongly recommend you to also watch the below video on how to trade options using Zerodha kite Demo.
This video will help you even more to learn the steps for Options trading in India. Watch it Now!!
In this article, we discussed how to trade options in India through a step-by-step guide. Here are the key takeaways from this article:. If you still have any doubts on how to trade options in India, feel free to comment below. Have a great day and happy trading!
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Brief Overview of Options Trading The most common concept that most of you must have heard about trading via options is the power to leverage. Basic Options Trading Definition To define in financial terms, Options are a derivative instrument that gives the right to option buyer to buy the underlying asset at a pre-decided price from the option seller, on or before expiry. Hitesh Singhi. Search Topic or Keyword Search for:.
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