Greek Meaning Impact on Option Price Behaviour Best Usage Example (Nifty/Bank Nifty) Delta (Δ) Measures how much an option’s price changes with a 1-point move in Nifty/Bank Nifty. Higher Delta = Greater price movement with the index. ITM options have high Delta (~1), ATM moderate (~0.50), OTM low (~0.10-0.30). Used for directional trades to predict … Read more
A Short Straddle involves selling a call option and a put option at the same strike price and expiry. It profits from minimal price movement. Ideal for low-volatility conditions, where price movement is expected to remain stable. Selling ATM options maximizes premium income. Risk is unlimited if the price moves significantly in either direction. Profits … Read more
A Long Straddle involves buying a call option and a put option at the same strike price and expiry. It profits from significant price movement in either direction. Ideal for high-volatility conditions, where a large price move is expected but direction is uncertain. Buying ATM options maximizes sensitivity to price changes. Risk is limited to … Read more
A Protective Put is a hedging strategy where you buy a put option to protect a long position in the underlying. It limits losses if the price unexpectedly falls. Ideal for bullish conditions, where there is a risk of price falling. Buying a slightly OTM put provides cost-effective protection. Limits potential losses on the long … Read more
A Protective Call is a hedging strategy where you buy a call option to protect a short position in the underlying asset. It works best when there’s a risk of the price rising unexpectedly. Ideal for bearish conditions, where the price might unexpectedly rise. Buying a slightly OTM call provides cost-effective protection. Limits potential losses … Read more