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6. Moneyness of option

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  • Опубліковано 14 сер 2024
  • In the previous video, we summarized all that we have learned about call options and put options. We also ended the video with the following questions:
    1. Who sets the premium?
    2. Which strike price to trade?
    3. What are factors that influence premiums?
    In this video, we discuss the concept of moneyness of an option which will help us answer these questions. Moneyness tells you whether you'll make money or lose money if you were to excerise the option. These are 3 classifications of moneyness:
    1. In the Money (ITM)
    2. At the Money (ATM)
    3. Out of the Money (OTM)
    These classifications will help you understand whether you'll make or lose money. In this video, we understand all these 3 terms.
    Learn more about monyeness here: zerodha.com/va...

КОМЕНТАРІ • 28

  • @gurubalaji5022
    @gurubalaji5022 23 дні тому

    00:10 Understanding the moneyness of an option
    01:03 Options have three possible outcomes based on stock price movement
    01:53 Understanding strike prices and option premium
    02:41 Options with strike prices close to the underlying price are at-the-money options.
    03:39 The moneyness of an option is determined by its relation to the current market price and strike price.
    04:27 Understanding the moneyness of options is crucial
    05:15 Understanding the moneyness of options
    06:03 Identifying in-the-money options and their premium

  • @sangameshyalligutti6159
    @sangameshyalligutti6159 Місяць тому

    Nice explanations

  • @navinj6445
    @navinj6445 Рік тому +1

    simple explanations I understand

  • @vishakhasapkal8022
    @vishakhasapkal8022 Рік тому +1

    Very well explained

  • @karansharma8646
    @karansharma8646 2 роки тому +3

    Sir ,if at expiry date the premium becomes zero but stock price going up in options buyers favor can he still exercise that option???

    • @nlaad13
      @nlaad13 2 роки тому +2

      If the stock price closes above the strike price of your call option on the expiry day then only you can exercise otherwise option will expire worthles…. And if you think logically why u will exercise an otm option u can directly buy from open market at lower price then your strike price in case of call option…

  • @karthicksnkrn
    @karthicksnkrn 7 місяців тому +2

    Mistake in 5:40 kindly check

  • @GaneshThore
    @GaneshThore Рік тому +1

    Thank you very much sir

  • @mathseducation6210
    @mathseducation6210 2 роки тому +2

    Sir please upload video daily.

  • @shivahiremath4929
    @shivahiremath4929 Рік тому +1

    Thank you sir 👍

  • @swapnil0402
    @swapnil0402 5 місяців тому +1

    Let's say I buy a call option for a 10 Rs premium at a strike price of 500 Rs and the lot size is 500. Expiry is 1 month. Let's say before the expiry of the stock price becomes 550 but the premium remains at 10 Rs or goes below to 8 Rs somehow, then whether I will make a profit or a loss?

    • @samitjain7936
      @samitjain7936 5 місяців тому

      Its not possible if underlying price is 550 then 500 strike call will be more or near to 50 rs as its intrinsic value

    • @subiani390
      @subiani390 3 місяці тому

      Premium will never go down if the stock price is going in the preferred directon, in case of call..if its going up.. for every point increase in price, premium price will increase which varies depending on various factors called option greeks

    • @Meera_malho
      @Meera_malho Місяць тому

      Loss

  • @sept271979
    @sept271979 2 роки тому +1

    Good job. Well explained.thank u!

  • @neerajsinghdeora2674
    @neerajsinghdeora2674 Рік тому +1

    how will call option buyer make money if price is going below his strile price ? and make loss when its going up ? you said exact reverse in the previous video

    • @varsitybyzerodha
      @varsitybyzerodha  Рік тому

      Hey Neeraj, you can refer to this chapter, we've explained with an example: zerodha.com/varsity/chapter/call-option-basics/

    • @shankargurutmp
      @shankargurutmp 7 місяців тому

      Yeah same doubt any explanation?

  • @bhavana5770
    @bhavana5770 Місяць тому

    Shared screens are not readable, not in focus.

  • @swathijayaraman1265
    @swathijayaraman1265 25 днів тому

    3.30 min to 5 min video i can't understand sir,

  • @amishacharaniya6397
    @amishacharaniya6397 Рік тому

    from where we can get the strike price and all price details?

    • @varsitybyzerodha
      @varsitybyzerodha  Рік тому

      You can find in the search box on the trading platform. All other details can be checked on the market depth.

  • @sanjitbehera8113
    @sanjitbehera8113 Рік тому

    Please sir me aapko request karta hun ye kese khelte he yaani ye aap kese chalate he or isme kese paise income karte he or iska kiya prosegiera he mujhe pata nhi aap krupiya karake mujhe bolie please🙏🙏🙏 me aaapke aage hat jod ke binati karta hu.... Mujhe e sab ke bareme detel me bataiye...

    • @varsitybyzerodha
      @varsitybyzerodha  Рік тому +1

      Hey Sanjit, you can look at all these videos to get a fair idea. We'll also look into releasing these videos in Hindi as well.

    • @sanjitbehera8113
      @sanjitbehera8113 Рік тому

      @@varsitybyzerodha mujhe hindi me boliye nehi toa muje samjh me nehi aayega hindi me msg kariye.....

    • @sibythomas9680
      @sibythomas9680 Рік тому +1

      Bhai iss channel ne hindi me video upload kiya hai. Zerodha varsity ka hindi video search karo. Mil jaayengi

  • @RahulS365
    @RahulS365 2 роки тому

    🤸