• HDFC
• 29 Apr 2017
• FNO Product

HDFC, Tester

Shorts and Longs

In the context of F&O markets, the buying of a Future or option, with the expectation that the asset value will rise is called a long position. Till you square this position by offsetting trade, this position will stay as a long position.

A short position is the opposite of going long. That is, short sellers make money if the Future or option sold, goes down in price. Till the time this position is squared up by an offsetting trade, the positions will stay as a short position. 

Put Option in F&O

Put Option gives the buyer the right, but not an obligation, to sell the underlying instrument at the strike price on or before the expiration date. A trader can buy a put option if he is bearish on a stock or index.

Call Option in F&O

Call option gives the buyer the right, but not an obligation, to purchase the underlying instrument at the strike price on or before the expiration date. A trader can buy a call option if he is bullish on a stock or index.

Intrinsic value in an Option

The intrinsic value of an option is the difference between the actual price of the underlying security and the strike price of the option.