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What is options trading, what are calls and puts, how do options work — complete Hindi guide for beginners.
Published by The Retail Trader · AUG 12, 2026 · Features
What is options trading, what are calls and puts, how do options work — complete Hindi guide for beginners.
Options are a derivative instrument that gives you the right (not the obligation) to buy or sell an asset at a specific price on a specific date.
Simple definition: > Options = Insurance. Do Premium, get RIGHT. If the market goes in your favor then you get profit, otherwise only loss of premium.
Call Option (CE):
• Right: right to buy
• Bullish view: You think the price will increase
• Example: Nifty 20,000 CE bought → If Nifty goes 20,500 → Profit
Put Option (PE):
• Right: right to sell
• Bearish view: You think the price will fall
• Example: Nifty 20,000 PE bought → If Nifty goes 19,500 → Profit
Keep these seven points in mind:
• Strike Price — Price at which option can be exercised
• Premium — Price of the option (what you pay)
• Expiry — Date when option expires
• Lot Size — Minimum quantity (Nifty = 25)
• ITM — In The Money — profitable to exercise
• ATM — At The Money — strike = current price
• OTM — Out of The Money — not profitable to exercise
Nifty at 20,000. You buy 20,200 CE at ₹80.
Keep these four points in mind:
• Strike — 20,200
• Premium — ₹80
• Lot size — 25
• Total cost — ₹80 × 25 = ₹2,000
Scenario 1: Nifty at 20,500 (above strike)
Keep these three points in mind:
• Option value: ~₹300
• Profit: (₹300 - ₹80) × 25 = ₹5,500
• Return: 275%
Scenario 2: Nifty at 20,200 (at strike)
Keep these three points in mind:
• Option value: ~₹0
• Loss: ₹2,000 (full premium)
• Return: -100%
Scenario 3: Nifty at 20,000 (below strike)
Keep these three points in mind:
• Option value: ₹0
• Loss: ₹2,000 (full premium)
• Return: -100%
Keep these six points in mind:
• Pays/Receives — Buyer: Pays premium, Seller: Receives premium
• Max loss — Buyer: Premium paid, Seller: Unlimited (call)
• Max profit — Buyer: Unlimited, Seller: Premium received
• Win rate — Buyer: ~30-40%, Seller: ~60-70%
• Time — Buyer: Against (theta hurts), Seller: In favor (theta helps)
• Best for — Buyer: Directional bets, Seller: Income, range-bound
Keep these six points in mind:
• Obligation — Options: Right (not obligation), Futures: Obligation, Stocks: Ownership
• Premium — Options: Yes, Futures: No (margin), Stocks: Full price
• Max loss — Options: Premium (buyer), Futures: Unlimited, Stocks: Full investment
• Leverage — Options: High, Futures: High, Stocks: Low
• Complexity — Options: High, Futures: Medium, Stocks: Low
• Best for — Options: Hedging, speculation, Futures: Directional bets, Stocks: Long-term
Option chain is a table that shows the premium, OI, and volume of call and put options for each strike price.
How to read:
• Call side (left): Call options data
• Put side (right): Put options data
• Strike (center): Price levels
• OI: Open Interest (active positions)
• Volume: Today's trades
Keep these four points in mind:
• Delta — Measures: Price sensitivity, Impact: Stock increases by ₹1 → How much will the option increase
• Gamma — Measures: Delta change, Impact: How much will Delta change
• Theta — Measures: Time decay, Impact: How much the option will decline every day
• Vega — Measures: Volatility sensitivity, Impact: IV increases by 1% → How much will the option increase
Step 1: Learn Basics:
• Read this article ✅
• Learn Option Greeks
• Learn to read Option Chain
Step 2: Paper Trading:
• practice with virtual money
• Start buying options
• use simple strategies
Step 3: Small Capital:
• Start from ₹10,000-20,000
• 1 lot only
• ATM or slightly OTM options lo
Step 4: Learn Strategies:
• Bull Call Spread
• Iron Condor
• Covered Call
• practice paper trading
"An option of ₹5 will become ₹500!" — 95% OTM options expire worthless. ATM or slightly OTM lo.
There is unlimited risk in options selling. Don't sell without knowledge.
Stop loss is also important in options. Premium drops 50% → exit.
Theta decays very fast in the last 3 days. Overnight hold is risky.
"Take the call, let's see" — options without strategy = gambling.
Keep these points in mind:
• 📌 OPTIONS QUICK REFERENCE
• WHAT IS IT:
• 📊 Right to buy/sell (not obligation)
• 📊 Pay premium, get rights
• 📊 Max loss = Premium paid (buyer)
• CALL vs PUT:
• 📊 Call (CE) — Right to BUY (bullish)
• 📊 Put (PE) — Right to SELL (bearish)
• TERMINOLOGY:
• 📊 Strike — Exercise price
• 📊 Premium — Option price
• 📊 ITM — Profitable to exercise
• 📊 ATM — Strike = Current price
• 📊 OTM — Not profitable to exercise
• BUYER vs SELLER:
• 📊 Buyer: Premium pay, unlimited profit, limited loss
• 📊 Seller: Premium receive, limited profit, unlimited loss
• GREEKS:
• 📊 Delta — Price sensitivity
• 📊 Theta — Time decay (enemy of buyer)
• 📊 Vega — Volatility impact
• 📊 Gamma — Delta change
• STARTING:
• 1️⃣ Learn basics (this article)
• 2️⃣ Paper trading
• 3️⃣ Small capital (₹10-20K)
• 4️⃣ Simple strategies
• AVOID:
• ❌ OTM options buying (95% expire worthless)
• ❌ Selling without knowledge
• ❌ No stop loss
• ❌ Expiry day holding
• ❌ No strategy
Keep these four points in mind:
• What Are Option Greeks?
• How to Read an Option Chain?
• Options Trading Strategies
• How Does F&O Expiry Work?
The Retail Trader — educational market analysis. Not investment advice.
This article is for educational purposes only. It is not a buy or sell recommendation, a claim of guaranteed returns, or advisory guidance. Exchanges, SEBI and RBI change rules, rates and procedures from time to time, so verify every figure with your broker or an official source.