Option Copy Trading
Option Copy Trading
This company remains the best in terms of customer service and prompt payment of profits. Kudos!.
Stephanie Andrews
Investor
My initial experience with investing was with Corporate-Skycrests, and I'm delighted that I took that leap.
Annie Hoffman
Single Mom
After my colleague at work advise to save for the future, we consulted our broker who recommended Corporate-Skycrests. I must admit, this has been the best financial decision I've ever made..
Patrick C.
Computer Engineer
I've been an investor since my teenage years, so I know how to spot a good investment. Corporate-Skycrests is ahead of many others. You guys rock!.
Ahmed Hakeem
Banker
Downloads
Option Copy Trading
Options are contracts that investors trade to speculate on whether an asset's price will rise or fall by a certain date in the future, without needing to purchase the asset itself.
For instance, Nifty 50 options enable traders to forecast the future movement of this key stock index, representing the broader Indian stock market. Although options may seem complex initially, they're straightforward once you grasp a few essential terms:
Derivative Nature: Options are derivatives, deriving their worth from another asset. For example, stock options' value hinges on the stock's price.
Call and Put Options: A call option lets you buy a security at a set price by a specific date, while a put option allows selling a security at a predetermined date and price.
Strike Price and Expiry Date: The agreed purchase or sale price in an option is its strike price, and options must be exercised by their expiration date.
Premium: This is the cost to buy an option, determined by the underlying asset's price and other factors. Intrinsic and Extrinsic Value: Intrinsic value is the difference between the option's strike price and the asset's current price, while extrinsic value encompasses other premium-influencing factors like time remaining until expiry.
In-the-money and Out-of-the-money: An option is in-the-money if it's profitable based on the asset's price and time left until expiration; otherwise, it's out-of-the-money.
How Options Pricing Works
Up Front
Let’s make sense of all of this terminology with an example. Consider a stock that’s currently trading for INR 100 a share. Here’s how the premiums—or the prices—function for different options based on the strike price. When trading options, you pay a premium up front, which then gives you the option to buy this hypothetical stock—call options —or sell the stock—put options—at the designated strike price by the expiration date Let’s make sense of all of this terminology with an example. Consider a stock that’s currently trading for INR 100 a share. Here’s how the premiums—or the prices—function for different options based on the strike price.
When trading options, you pay a premium up front, which then gives you the option to buy this hypothetical stock—call options —or sell the stock—put options—at the designated strike price by the expiration date.
A lower strike price has more intrinsic value for call options since the options contract lets you buy the stock at a lower price than what it’s trading for right now. If the stock’s price remains INR 100, your call options are in-the-money, and you can buy the stock at a discount.
Conversely, a higher strike price has more intrinsic value for put options because the contract allows you to sell the stock at a higher price than where it’s trading currently. Your options are in-the-money if the stock stays at INR 100, but you have the right to sell it at a higher strike price, say INR 110.
