On Monday 29 Jun 2026 Nifty closed at 23,946.25. The call at the 24,000 strike, expiring Tuesday 7 Jul, settled at Rs 176.65 a unit. A lot is 65 units, so the price tag was Rs 11,482.25, and that was the most a buyer could lose. On 7 Jul Nifty closed at 24,398.70. The right to buy at 24,000 was now worth Rs 398.70 a unit, and the Rs 11,482.25 had become Rs 25,915.50. Had Nifty closed at or below 24,000, the same Rs 11,482.25 would have gone to zero. A call is a small payment for a big if. I do not call it a bet. It is a priced right, and this lesson takes that right apart.
3By the end you can
- Say what a call buys, in plain words: a right to buy at the strike, not a duty.
- Work out a bought call's breakeven and its result at expiry for one lot.
- Tell a future from an option and name who carries the duty in each.
The idea, plainly
You like a flat. The builder takes a booking amount and holds today's price for three months. If prices jump, you buy at the old price. If they fall, you walk away and lose the booking amount, nothing more. A call option is that arrangement on the Nifty. Four words describe it.
- Strike. The fixed price in the right. Here 24,000.
- Premium. The booking amount, in rupees per unit. Here Rs 176.65.
- Expiry. The last day of the right. Nifty weekly options expire on Tuesdays.
- Lot. The units in one contract. For Nifty it is 65.
Read one more paragraph, 64 words
Nobody hands you the Nifty. Index options settle in cash. On expiry day the exchange compares the index close with the strike and pays the difference, if there is one. These options are European style, so the right is used only on expiry day. You can still sell the call to someone else before then, at whatever price the market gives it that day.
F&O in one minute
F&O means futures and options. Both are derivatives: contracts whose value comes from something else, here the Nifty. A future binds both sides. Buyer and seller agree a price today, and both must settle on the day. An option binds one side. The buyer holds a right and pays for it. The seller takes the premium and takes the duty. A call is the right to buy. Its mirror, the right to sell, is the put, in module F12. Module F01 tells where this started and module F07 covers futures.
A future binds both sides. A call lets the buyer choose
Who buys a call, and who sells it
A buyer wants the gain from a rise for a fixed, known cost. The view that the index will rise is the buyer's own and is not a signal for anyone else. The seller takes the premium and carries the duty to deliver the gain if the index rises. Whatever one side makes, the other loses, so before costs the two results add to zero. Module F13 follows both sides to expiry.
What the right is worth on expiry day
At expiry the right is worth the index close minus the strike, or nothing, whichever is larger. Take away the premium you paid and you have the result. The result is zero when the index closes at the strike plus the premium. That is the breakeven.
Breakeven =
strike + premium
A bought call loses the premium until the breakeven, then gains point for point
Read 2 more paragraphs, 90 words
On the way up the call has no cap: every point above the breakeven adds a rupee a unit. On the way down the loss stops at the premium. That lopsided shape is the whole appeal of a call, and the premium is what it costs. If the index does not rise far enough before expiry, the premium is gone.
The 24,000 call had a breakeven of 24,176.65. Nifty closed at 23,946.25 on 29 Jun, so the buyer needed a rise of 0.96% before the first rupee of profit.
The chain is a price list
Put the calls of one expiry side by side and a pattern shows. A lower strike lets you buy cheaper, so it costs more. The 23,800 call settled at Rs 293.10, the 24,000 call at Rs 176.65 and the 24,200 call at Rs 95.55. Strikes sit 50 points apart here. Module F17 reads the whole chain, column by column.
A higher strike means a cheaper call and a dearer put
| Calls | Strike | Puts |
|---|---|---|
| Settle | Settle | |
| 363.70 | 23,700 | 77.65 |
| 329.25 | 23,750 | 91.70 |
| 293.10 | 23,800 | 107.00 |
| 261.70 | 23,850 | 125.60 |
| 231.10 | 23,900 | 145.35 |
| Spot 23,946.25 | ||
| 203.85 | 23,950 | 169.35 |
| 176.65 | 24,000ATM | 189.50 |
| 154.15 | 24,050 | 219.25 |
| 131.55 | 24,100 | 243.65 |
| 113.75 | 24,150 | 277.15 |
| 95.55 | 24,200 | 308.60 |
| 79.70 | 24,250 | 344.40 |
| 67.00 | 24,300 | 380.45 |
Shaded cells are in the money. OI is in units and volume is in contracts; L is lakh and Cr is crore.
Read one more paragraph, 58 words
Before expiry a call still carries time, which is why the curves in the payoff chart sit above the straight lines. You can sell the call back to the market on any day. At expiry the time is gone and only the difference between the index and the strike remains. Modules F14 and F15 take the price apart.
Worked example: one Nifty week, 29 Jun to 7 Jul 2026
We follow one lot of the 24,000 call from the close of 29 Jun to settlement on 7 Jul, before any charges. The forward for that expiry was 23,985.84. A weekly expiry has no future, so the forward is read off a call and a put at one strike, as module F17 shows. Settlement is the Nifty close on expiry day, the rule for every expiry before 7 Dec 2026.
| Step | What we read | Value |
|---|---|---|
| 1 | Nifty close, 29 Jun | 23,946.25 |
| 2 | Strike of the call | 24,000 |
| 3 | Premium per unit | 176.65 |
| 4 | One lot of 65 units, paid upfront | Rs 11,482.25 |
| 5 | Breakeven at expiry: strike plus premium | 24,176.65 |
| 6 | Nifty close, 7 Jul, the settlement | 24,398.70 |
| 7 | Value of the right per unit: close less strike | 398.70 |
| 8 | Value of one lot | Rs 25,915.50 |
| 9 | Result: value less the price paid | Rs 14,433.25 |
| Nifty closes at | Right is worth, per unit | Result, one lot |
|---|---|---|
| At or below 24,000 | 0 | −Rs 11,482.25 |
| 24,100 | 100 | −Rs 4,982.25 |
| 24,176.65 | 176.65 | 0 |
| 24,398.70 | 398.70 | Rs 14,433.25 |
2 terms this section turns on
Read 2 more paragraphs, 74 words
Nifty rose 1.89% in 8 calendar days. The buyer turned Rs 11,482.25 into Rs 25,915.50. Now run the same lot through other finishes.
One week proves nothing. A flat week would have ended in the first row. The week shows the shape: a fixed, known cost on one side, and a gain that grows with every point above the breakeven. The seller of this call is on the other side of every row.
The common mistake
The belief: If Nifty finishes above the strike, the call buyer makes money.
It sounds like arithmetic. But the strike is only where the right starts to have a value, and the premium has to be earned back first. Suppose Nifty had closed at 24,100 on 7 Jul. That is 100 points above the 24,000 strike, so the right is worth Rs 100 a unit. The buyer paid Rs 176.65. The lot lost Rs 4,982.25 on a day when the call finished in the money. Always read two numbers: the strike, and the strike plus the premium. The first is where the value starts. The second is where the profit starts.
Key takeaways
- A call is the right to buy at the strike, paid for with a premium.
- A bought call risks its premium and no more.
- Breakeven is the strike plus the premium, not the strike.
- Nifty options settle in cash against the index close at expiry.
- A future binds both sides. A call binds only the seller.
- A lower strike costs more, because it lets you buy cheaper.
Before you trade. Derivatives trading carries a high risk of loss. SEBI's study "Profitability of Individual Traders in the Equity Derivatives Segment (FY25 to FY26)" (August 2026) found that 87.7% of individual traders in equity F&O made net losses in FY26, with aggregate net losses of Rs 91,685 crore. Read the SEBI study