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RupeeCase Learn/Path 14/Beginner

Options and Greeks

Calls and puts, buyers and sellers, moneyness, what moves a premium, pricing from a binomial tree to Black 76, put call parity and every Greek.

  • 17modules
  • 149 minof reading
  • 30question path test
  • Freewith a certificate
Start at 14.1See the stops

01The line

17 stops, 17 live.

The building blocks of every option position. Rights against obligations, intrinsic and time value, and the Greeks that say how a premium moves when the index, time or volatility moves.

0of 17 done on this device

  1. 14.1The call option, told as a storyA call is a right to buy, paid for with a premium. What it costs, what it needs and what it pays, on one dated Nifty week8 min
  2. 14.2The put option, told as a storyA put is a right to sell, paid for with a premium. What it costs, what it needs and what it pays, and the six positions that make up F&O8 min
  3. 14.3Buyer or seller: payoffs, margin, win rate and expectancyOne Nifty call, two accounts: who can lose more than the premium, what margin each side posts, and why winning often is not the same as making money9 min
  4. 14.4Moneyness, intrinsic value and time valueEvery option price is intrinsic value plus time value. Split it, and ITM, ATM and OTM stop being jargon8 min
  5. 14.5Five things that move an option's priceWhy a call can fall on a day Nifty rises. Five dials move an option's price, and the index is only one of them8 min
  6. 14.6Expiry and settlement: cash, physical, exercise and STTAt expiry an index option is a subtraction and a cash payment. A stock contract is a delivery. What each costs, and what in the money really means8 min
  7. 14.7Delta: speed, hedge ratio and the probability shortcutWhat delta says about an option's speed, how many units of the future it behaves like, and why it is not a chance of profit8 min
  8. 14.8Theta: the time decay curve into expiryA day of decay is not a fixed fee. It is a curve that is slow with weeks left and steep on the last day7 min
  9. 14.9From a binomial tree to Black Scholes and Black 76An option price is an average of payoffs, set by five inputs. Four are on the screen and the fifth, volatility, is solved from the price9 min
  10. 14.10Put call parity and synthetic positionsA bought call and a sold put pay what a future pays. That one fact lets every strike on the chain check the future9 min
  11. 14.11Gamma: why it grows so fast near expiryGamma is how fast delta changes. It is small with weeks left and large with a day left, and it is paid for in theta8 min
  12. 14.12Vega: volatility exposure across weekly and monthly expiriesVega converts a change in implied volatility to rupees. It grows with time, and the volatility itself moves differently by expiry9 min
  13. 14.13Rho and interest rates in Indian optionsRho is the rate Greek. On Nifty options the sign depends on what you hold fixed, and the size is small next to vega8 min
  14. 14.14Position Greeks for multi leg strategiesAdd the Greeks of the legs, with sign and units, and a multi leg trade turns into four numbers that say what it is exposed to9 min
  15. 14.15Dynamic delta hedging and the P&L identityA hedged option earns the gap between the move that happened and the move that was priced. The direction drops out10 min
  16. 14.16Gamma scalpingA gamma scalper buys the days when the index moves more than priced and pays theta for the rest. The edge is not automatic10 min
  17. 14.17Second order Greeks: vanna, volga, charm, speed and colourDelta, gamma, vega and theta are first drafts. Vanna, volga, charm, speed and colour say how they change. On a dated chain, each has a place where it matters13 min, path test

02Outcomes

What you will be able to do.

  • 01Draw the payoff of a bought and a sold call or put at expiry
  • 02Split a premium into intrinsic value and time value
  • 03Read delta, gamma, theta and vega in rupees per lot
  • 04Check put call parity on a dated NSE chain

03Certificate

Pass the path test.
Keep the proof.

  1. 1Read the modules and try each quick check (optional)A pass gives that module's own certificate
  2. 2Take the 30 question path test21 correct to pass, drawn from 256 questions
  3. 3Get the certificateWith an ID and a QR code
Jump to the path test About the certificates

04Questions

About Path 14.

What does Path 14, Options and Greeks, cover?

Calls and puts, the buyer and the seller, moneyness, intrinsic and time value, what moves a premium, pricing with Black 76, put call parity, and the Greeks from delta to the second order ones.

Is option buying or selling better?

Neither is better in general. The path shows what each side risks and earns on dated NSE chains, with costs, so the trade off can be read from the payoff, not from a claim.

Do I need maths for Path 14?

Arithmetic and a calculator are enough for the Beginner modules. The pricing modules show the formulas, and the Greeks calculator runs the same engine.

Explore next

Where to go next.

Before this pathPath 12: Derivatives Basics and RulesBeginner, 9 modules Pillar guideDerivatives and Quant115 modules F&O on RupeeCaseHedging only, in developmentProtection for a portfolio you own, by a published rule

Education only, not investment advice, a research report or a recommendation to buy, sell or hold any security. RupeeCase (QC Alpha Technologies Pvt Ltd) is not registered with SEBI as an investment adviser or research analyst. Contracts and prices shown are for illustration only, come from NSE end of day files at least 30 days old, and are not recommendatory. Derivatives trading carries a high risk of loss.