Option Trading

Types of Options: Calls and Puts

Options are divided into two main categories:

Call Options: The buyer of a call expects the underlying asset’s price to rise. For example, if a trader buys a call option on Reliance stock with a strike price of ₹2500, and the stock rises to ₹2600 before expiry, the trader can exercise the option and profit from the difference.

Put Options: The buyer of a put expects the asset’s price to fall. If the same Reliance stock falls to ₹2400, the put option buyer profits by selling at ₹2500 (the strike price).
Call and put options can be used separately or in combination to create complex strategies based on different market conditions.