Finfo Traders

 Time Decay, also known as Theta, is one of the most important concepts in option trading. It affects the value of your options every single day — even if the market doesn’t move! Let’s understand it in the easiest way possible. 🔹 What is Time Decay? Time Decay means that as the option gets closer to its expiry date, the premium (price) of the option reduces — even if the market stays flat. This happens because options are wasting assets. They lose value over time. 📉 Example: You bought a Nifty 22,800 CE at ₹100 — with 7 days to expiry. Let’s say Nifty stays flat at 22,800: Days Left Option Premium 7 days ₹100 5 days ₹80 3 days ₹55 1 day ₹25 ✅ Even without movement, the premium drops due to time decay! 🔍 What is Theta? Theta is a Greek value that tells you how much premium will reduce daily. Example: If Theta = -5 → Option will lose ₹5/day (if market stays flat) 🧠 Why It Matters: If you're buying options, time decay works against you If you're selling options, time decay wo...

 If you’re confused by the terms ATM, ITM, and OTM while trading options — don’t worry. This is one of the most important basics every trader should know. Let’s simplify it with examples 👇 🔹 What is ATM (At the Money)? ATM means the strike price is closest to the current market price of the asset. ✅ Example: Nifty is at 22,750 Closest strike = 22,750 → this is ATM 👉 Used for: Scalping High volume trades Good liquidity 🔹 What is ITM (In the Money)? ITM means the strike price is already profitable if exercised immediately. ✅ Call Option (CE) is ITM when: Strike Price < Spot Price Example: Nifty is at 22,800 → 22,700 CE is ITM ✅ Put Option (PE) is ITM when: Strike Price > Spot Price Example: Bank Nifty is at 48,200 → 48,500 PE is ITM 👉 Benefits: Higher premium Higher delta More stable 🔹 What is OTM (Out of the Money)? OTM means the option is not yet profitable, but may become profitable if the price moves. ✅ Call Option (CE) is OTM when: Strike Price > Spot Price Exampl...

 If you’re new to options trading, the terms Call Option and Put Option can be confusing. This guide will explain the difference in the simplest way — with examples. 🔹 What is a Call Option? A Call Option gives you the right to buy an asset (e.g., Nifty, Bank Nifty, stocks) at a specific strike price before expiry. You buy a Call when you think the price will go up. ✅ Example: Nifty is at 22,600 You buy a 22,700 CE (Call Option) If Nifty moves to 22,800 → your Call Option gains value 🔹 What is a Put Option? A Put Option gives you the right to sell an asset at a specific strike price. You buy a Put when you think the price will go down. ✅ Example: Bank Nifty is at 48,000 You buy a 47,800 PE (Put Option) If Bank Nifty drops to 47,500 → your Put Option gains value 📊 Key Differences: Feature Call Option (CE) Put Option (PE) Right to... Buy Sell Market View Bullish (price up) Bearish (price down) Profit if... Price rises Price falls Use Case Trend following Market crash hedge 🧠 How ...

Understanding strike price is one of the first steps in learning options trading. It helps you choose the right entry point and analyze the risk-reward. Let’s break it down in simple terms with examples. 🔹 What is Strike Price? A strike price is the price at which you agree to buy or sell the underlying asset when you trade an option. In simple words: For Call Options: Strike price is the price you can buy the asset For Put Options: Strike price is the price you can sell the asset 🔍 Example 1: Nifty Call Option Let’s say: Nifty is currently at 22,700 You buy a Call Option with strike price 22,800 That means: you’re betting Nifty will go above 22,800 If Nifty moves to 23,000 → you profit If Nifty stays below 22,800 → you lose the premium 🔍 Example 2: Bank Nifty Put Option Let’s say: Bank Nifty is at 48,500 You buy a Put Option with strike price 48,000 You profit if Bank Nifty goes below 48,000 📈 Strike Price vs Market Price Situation Strike Price Spot Price Result ITM (In the Money)...

 Many beginners ask: "Can I start option trading with ₹1,000? Or do I need ₹1 lakh?" Let’s break down exactly how much capital you need to begin option trading in India in 2025 — with real examples. 🔹 1. Minimum Capital Required – Buying Options If you're just buying options (Call or Put), you don’t need full margin — just the premium × lot size. Example (Nifty): Lot Size: 50 Premium: ₹40 Capital Needed: ₹40 × 50 = ₹2,000 ✅ You can start buying options with ₹2,000 to ₹5,000 🔹 2. Capital for Selling Options (Writing) Selling options (calls or puts) requires higher margin — around ₹1–1.5 lakhs per lot (as of 2025), depending on: Strike price Volatility Margin benefit (with hedging) ✅ With proper hedge, margin can reduce to ₹20,000–₹50,000 per trade. 🔹 3. Trading Bank Nifty – Cost Example Bank Nifty Lot Size = 15 Premium = ₹120 Buy 1 lot = ₹120 × 15 = ₹1,800 Sell 1 lot (with hedge) = ~₹35,000–₹45,000 🔹 4. Other Costs to Consider Type Approximate ₹ Brokerage ₹20/order (Ze...

 Lot size is one of the most important basics you must know before placing any options trade. Here's a clear explanation — without confusion. 🔹 What is Lot Size? In option trading, you don’t buy/sell single shares. Instead, you buy a lot — which is a fixed number of shares grouped together. So when you buy 1 lot of Nifty options, you’re actually buying 50 shares (as of 2025). 🔹 Why is Lot Size Important? Premium is multiplied by lot size Example: If premium = ₹30 and lot size = 50, → ₹30 × 50 = ₹1,500 is needed per lot Profit/Loss is calculated using lot size If premium moves ₹10 → Profit/Loss = ₹500 (₹10 × 50) Margin required depends on lot size + strategy 📊 Current Lot Sizes for Popular Indexes (2025) Instrument Lot Size Nifty 50 Bank Nifty 15 Fin Nifty 40 Sensex 15 (Note: Lot sizes may change yearly – always check NSE updates) 📊 Current Lot Sizes for Popular Stocks Stock Lot Size Reliance 250 HDFC Bank 550 Infosys 300 TCS 150 ❗ Important Tip: Never place an option trade with...