Powerful and risky. Learn how derivatives work — payoffs, Greeks and structures — strictly as concepts. Expand any topic. Never a trade call.
Pick a strategy and change the numbers to see the payoff at expiry redraw live. Profit is shaded green, loss red; the white dots mark break-evens. Every value is a hypothetical you enter — never a recommendation.
X-axis = underlying price at expiry; Y-axis = profit/loss. Educational illustration only.
Start here before anything else in derivatives.
A call gives the right to buy, a put the right to sell, at a set strike before/at expiry. The buyer pays a premium; the seller receives it and takes on obligation.
Educational explanation only — not a signal, recommendation, target or stop loss.
Premium = intrinsic value (how far in-the-money) + time value (everything else). Time value decays to zero at expiry.
Educational explanation only — not a signal, recommendation, target or stop loss.
Describes the strike relative to spot: in-, at-, or out-of-the-money. It drives how an option behaves.
Educational explanation only — not a signal, recommendation, target or stop loss.
Indian index options are cash-settled on expiry. Understanding expiry mechanics is essential before trading derivatives.
Educational explanation only — not a signal, recommendation, target or stop loss.
The sensitivities that explain why an option's price moves.
Sensitivity of option price to a 1-unit move in the underlying. Also loosely read as the probability of finishing in-the-money.
Educational explanation only — not a signal, recommendation, target or stop loss.
The rate of change of delta — how quickly delta shifts as the underlying moves. Highest near the strike and near expiry.
Educational explanation only — not a signal, recommendation, target or stop loss.
Time decay: how much value an option loses per day, all else equal. Accelerates into expiry. A cost for buyers, a tailwind for sellers.
Educational explanation only — not a signal, recommendation, target or stop loss.
Sensitivity to implied volatility. Rising IV inflates premiums; falling IV deflates them.
Educational explanation only — not a signal, recommendation, target or stop loss.
Sensitivity to interest rates — usually the least impactful Greek for short-dated options.
Educational explanation only — not a signal, recommendation, target or stop loss.
The market's expectation of future volatility, backed out of option prices. High IV means expensive options.
Educational explanation only — not a signal, recommendation, target or stop loss.
Combinations taught for their risk-reward shape — not as recommendations.
Holding the underlying while selling a call against it — a concept for generating premium with capped upside.
Educational explanation only — not a signal, recommendation, target or stop loss.
Holding the underlying and buying a put as 'insurance' against a fall — the cost is the premium.
Educational explanation only — not a signal, recommendation, target or stop loss.
Buying (or selling) a call and put at the same strike — a pure bet on volatility, not direction.
Educational explanation only — not a signal, recommendation, target or stop loss.
Like a straddle but with out-of-the-money strikes — cheaper, needs a bigger move.
Educational explanation only — not a signal, recommendation, target or stop loss.
Selling an OTM call spread and an OTM put spread — a defined-risk, range-bound volatility structure.
Educational explanation only — not a signal, recommendation, target or stop loss.
Combining two options to express a directional view with capped risk and reward.
Educational explanation only — not a signal, recommendation, target or stop loss.
A three-strike structure profiting from low movement around a central strike, with defined risk.
Educational explanation only — not a signal, recommendation, target or stop loss.
Linear contracts and the mechanics of leverage.
A standardised contract to buy/sell an asset at a future date and agreed price. Linear payoff, unlike options.
Educational explanation only — not a signal, recommendation, target or stop loss.
Exchanges require upfront margin (SPAN + exposure) to cover potential losses. Leverage cuts both ways.
Educational explanation only — not a signal, recommendation, target or stop loss.
Futures positions are settled daily against the closing price — profits/losses hit your account each day.
Educational explanation only — not a signal, recommendation, target or stop loss.
The gap between futures and spot, driven by interest and time to expiry.
Educational explanation only — not a signal, recommendation, target or stop loss.
Moving a position from the expiring contract to the next month — and what rollover data describes.
Educational explanation only — not a signal, recommendation, target or stop loss.
Using derivatives to offset risk in an existing exposure, rather than to speculate.
Educational explanation only — not a signal, recommendation, target or stop loss.
Derivatives carry high, sometimes unlimited, risk; most retail F&O traders incur losses. Nothing here is a strategy recommendation, signal or assurance. We are not SEBI registered. Consult a SEBI registered professional before trading derivatives.