Part 10 Trade Like Institutons

Call Option (CE) Explained

A call option benefits from price going UP.

Call Buyer

Pays premium.

Unlimited profit potential.

Loss limited to premium paid.

Call Seller

Receives premium.

Profit limited to premium received.

Loss can be unlimited if price rises sharply.

Example:
You buy Nifty 22000 CE for ₹100.
If Nifty moves to 22100 at expiry, your option becomes ITM (In-the-money).
Intrinsic value = 22100 – 22000 = 100
You break even at 22100.

If Nifty moves to 22200,
Intrinsic value = 200
Profit = 200 – 100 = 100.