Part 2 Ride The Big Moves

Key Components of Option Contracts

Every option has specific terms that determine its value and use:

Underlying Asset: The stock, index, or commodity the option is based on.

Strike Price: The pre-decided price at which the buyer can buy or sell the asset.

Premium: The price paid to purchase the option.

Expiry Date: The date when the option contract ends.

Lot Size: The number of shares per contract (e.g., 50 shares for NIFTY options).
The value of an option depends on factors such as the market price of the asset, time left to expiry, and volatility. These factors influence whether the option is in-the-money (ITM), at-the-money (ATM), or out-of-the-money (OTM).