How To Do Options Trading With App: A Step-By-Step Guide For Beginners

As a hedging strategy, options trading allows traders to buy or sell an underlying asset at a stated price on a particular future date. Options trading involves speculation based on various factors, including the price sensitivity of the underlying asset. Derivative traders buy or sell an option after analyzing future moves of the underlying asset. They need to determine the perfect time to take and exit the positions based on option trading strategies. 

Determining the option price -the premium - should also be well-strategized. It is the price at which you are ready to enter an option. The premium is primarily based on intrinsic value - the price difference between the current price and the strike price of the underlying asset. Traders subtract the strike price from the current price to determine the premium. A higher premium means lower returns. 

Talking about expiry, an option can have a short-term or long-term expiry. A longer expiration is useful. 

Sign up for your trading account and start derivatives trading online at web-based or application-based trading platforms. You can trade stock options through the National Stocks Exchange (NSE) and the Bombay Stocks Exchange (BSE) and require a trading account with the broker to access these exchanges.


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