Premium- Nothing but price which can determined by various parameters of greeks.
Quantity- Which called as lot size which already fixed for each different script. Example - Nifty-75, Banknifty-25.
It can be change time to time as per overall value (Spot Price of underlying x quantity) by regulations.
(Expiry) Time- Each premium come with specific expiry time, where options can be exercised with spot of underlying.
Options acquired by a buyer (holder) and granted by a seller (writer) to buy at a fixed price.
Strike price - the price at which an option contract gives the holder the right to buy/sell.
Why Option Trading
There are so many pros and cons. listing why we prefer options.
Hedge funds (People can hedge holding equity or future segment which minimized the unlimited risk and improve probability of profit even underlying stay there).
Margin Benefits (If you have any kind of holding portfolio, you can pledge it for margin like debt, equity, mutual fund etc. with small haircut). Must read broker rules before doing it.
Limited Risk (As we only pay small premium which is 2% to 5% of underlying future value, so max risk only that value which also can minimize with various technique).
High Reward (Mostly Market stay in some range almost 67% chances as per standard deviation rules; where trend follower cant make money easily but option player can).
Reinforce stop loss concept when buying
Income enhance by selling
Tension free holding position until expiry date.
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