Disclaimer: Stock market trading is a risky affair. Please practice concept accurately before doing any trading. It is always advisable to consult your financial advisor before making any live trade. Options trading for beginners - Call Selling explained Hi Guys, In this video, I will explain what actually happens when you Sell Call options. When you sell call option you are selling a right to some one and they by incurring an obligation. What kind of obligation? An obligation can be explained as the call buyer will have right to Buy an underlying asset from you at strike price within validity of the contract period.For example if you have sold call option of RIL, Strike price 900, the call buyer has a right to Buy RIL from you at 900. Now imagine, when he will do that, when market price of RIL increases in excess of rs 900. So if RIL increases and opens at 1200, call option buyer will ask you to deliver 500 RIL at rs 900 and to do that you have to buy 500 RIL at 1200 and sell it to call buyer at 900. There by incurring loss of 1.50 lakh (500*300) in exchange of credit of Rs. 9000 ( say when you sold cal option at 18 rs). Here you will be ready to take unlimited loss in exchange of fixed profit. However here your chance of profiting is also higher because you will be making money in 2 out of 3 scenarios viz,. if stock stays stable and goes down. Hope you guys find this video useful . Please like my videos and subscribe to my channel for regular updates. Connect with me: https://www.facebook.com/Nifyfy/ https://twitter.com/cakashoza https://plus.google.com/109416086497755161450
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