IMPORTANT QUESTION ::

I bought 1 lot NIFTY 4500 CE 25 sep at 36 rs prem. I just wanted to do my first trade so started with minimum risk. Now i have a doubt in my mind

1. IF mkt rises to 4400 from current 4228 then its sure my prem will rise ( though time decay will be there ) and i can sq of my call in profits. I have a doubt in mind , if for eg , 4500 is not reached which is a high probability right now , then i read my options expire worthless , what does this mean. Does this mean that the whole PREM I PAID will be wiped away to zero.???

2. IF its is wiped away to zero then the best way would be to gather whatever money u can and sell 1-2 days before expiry.

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1.

Yes coolboy, If the nifty closes below 4500 your call option will expire worthless,whch means you will loose the entire premium paid.




2 ..

The moment you are convinced that the chances of Nifty closing above 4500 are poor,sell yr call fast to recover whatever premium you get ,because as the days pass the premium is going to go down due to time decay !!!


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!!! PS : INITIALLY BUY ONLYYYYYYYYY **CALL OPTIONS ** !!!!!!!!!!

!!! PPS : THEN , SPECIALIZE IN **BUY inggg** CALL & PUT OPTIONS !! !! !!

PPPS : THEN WEN U BECOME AN EXPERT IN ALL THESE , THEN ONLY , THEN ONLY EVEN FANTASIZE ABT. SELLING ** AN OPTION **