ITM = profitable, ATM = near strike, OTM = out-of-money. Tip: Options Trading System explains practical examples.
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What is the difference between call and put options?
Call gives right to buy, put gives right to sell. Tip: BullsWorld’s [Options Trading System](https://bullsworld.com/options-trading-system/) both in detail.
What is the difference between futures and options?
Futures obligate contract settlement; options give choice. Risk differs, premium involved for options.
How to calculate option payoff?
Option payoff diagrams show profit/loss at expiry. Use strike, premium, and stock price for calculation.
How to use options for hedging portfolio?
Buy index puts or sell calls to protect downside risk. Tip: BullsWorld’s [Options Trading System](https://bullsworld.com/options-trading-system/) teaches practical hedges.
How to calculate payout in options?
For calls: Max Profit = Unlimited, Max Loss = Premium. For puts: Max Profit = Strike – Premium, Max Loss = Premium.
How to choose strike prices in options?
Pick strikes based on risk appetite: ITM for safety, ATM for balance, OTM for speculation.
How to calculate option time value?
Time Value = Option Premium – Intrinsic Value. It decays as expiry nears.
How to calculate profit in options?
Profit = (Sell Price – Buy Price – Premium Paid) × Lot Size. Calls and puts differ in behavior.
How to use options for income?
Covered calls and cash-secured puts generate regular income. Requires disciplined risk management. Tip: BullsWorld’s [Options Trading System](https://bullsworld.com/options-trading-system/) explains income strategies.