We are only conducting Seminars to make Professional Traders. Join Now for Hyderabad and Chennai Seminar. The material published on the blog is of general and educational information only and is not suitable for trading purpose.

In the Money or Out of the Money Options Contract Explained



In the money

Options are luring and thus one need to understand the terminology associated with it. A contract is ‘in the money’ when a profit can be made from exercising the contract. The below image explains the same very beautifully and remember to note the breakeven point and extra calculative traders should not forget to add the brokerage associated with options trading. Check the best broker in India who charges minimum brokerage and trade with minimum brokerage else it is like a black hole which keeps eating into your profit with you even realising it.



A call option is ‘in the money’ when the settlement value of the asset is higher than the strike price.  A put option will be 'in the money' when the settlement value is lower than the strike price.

Out of the Money

An option contract is ‘out of the money’ when a profit cannot be generated from exercising the contract. A call option is ‘out of the money’ when the strike price is higher than the spot value of the asset. A put option is ‘out of the money’ when the strike price is lower than the spot value of the asset.

Check our take on the options that why buying options is not good for your financial health unless you are going to use it as a hedging tool. Alternately use the intraday tip and make money like professionals with a small capital of Rs 10,000. Remember to read F&O Basics before you start trading in this segment.

Most Visited Stocks - Click to Visit Link

 
We Teach and Train our Readers as we want to make sure that Readers become thorough professionals. We do not provide any stock tips. Please do not make any payments. Your joining or reading content is subject to acceptance of our terms and Disclaimer for which link is given on the site at bottom right hand corner. Wherever the word tip is written; it implies an idea which is of informational value and is not suitable for trading. Trade ideas if any are for educational purpose only. We are conducting Seminars to make Professional Traders. Join Now for Bangalore, Chennai and Hyderabad. Leave query through contact form.
Chart> Nifty A B C D E F G H I J K L M N O P Q R S T U V W X Y Z 0-9