Finction of call_and_put_options trading

Jun 28th, 2015
Studypool Tutor
A. T. Still University
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Outlining your options The advent of trading in options in India opens up exciting investment opportunities with a new vocabulary and understanding. Should you “straddle” or “strangle?” Or perhaps create your own “combination?” By taking up one option strategy every week, we hope PUT & CALL will clarify such questions and more. We will correlate theory to real-world examples from the Indian markets, complete with an Excel worksheet to instantly calculate payoffs. For starters, here’s how to straddle the new world of options.

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Option DeltaThe delta of an option is the sensitivity of an option price relative tochanges in the price of the underlying asset. It tells option traders howfast the price of the option will change as the underlying stock/futuremoves.The above graph illustrates the behaviour of both call and put optiondeltas as they shift from being out-of-the-money (OTM) to at-themoney (ATM) and finally in-the-money (ITM). Note that calls and putshave opposite deltas - call options are positive and put options arenegative.Option delta is represented as the price change given a 1 point movein the underlying asset and is usually displayed as a decimal value.Delta values range between 0 and 1 for call options and -1 to 0 for putoptions. Note - some traders refer to the delta as a whole numberbetween 0 to 100 for call options and -100 to 0 for put options.However, I will use the decimal versi

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