There has been 273 lac crore of daily transaction that occurs in the share market and option covers the major part of it. Option trading basically happens in the index like nifty bank nifty , fin nifty and in shares. In a simple form just a making valid prediction that price moves upward or downward with the proper technical and news analysis and with the psychology of option buyer or seller with the reflection of charts in option trading. There are two type of options call option and the put option call option basically when the market on upper side and put option when the market is on its lower side or the value has been diminishing . In index there are many type of indices like nifty, bank nifty and many more but most people trade in the nifty and bank nifty the nifty fluctuation has been decided through the top nifty so stocks with there percentage contribution in the particular aspect. The top nifty so stocks are Reliance , L&T, Infosys, TCS, are with their maximum percentage in the fluctuation in the market and in the bank nifty the maximum percentage of fluctuation stock in HDFC, ICICI,SBI, and many with their price action their is fluctuation in the market.
Option trading traded with the different premium as per the market like some terms are:
ATM (At the market) :- It means that when the bank nifty or nifty at it particular position the purchasing will be on its current value with short premium.
ITM (In the market) :- It means that when the indices are at its current value the ITM will be on its lower and upper side depends on the call option or the put option its premium value is high but there is low chances of risk due to . No much fluctuation in the decay.
OTM (Out the market) :- OTM basically is terms from the value of the current market the premium is lower as compare to ATM or ITM.
Some major concept of option trading
1. Time decay :- When the market is fluctuating and getting stucked on the particular price the time decay with lower the value of premium.
2. Scalping :- It require huge capital to catch short point with lowest time period with particular percentage of profit or stop loss.
