An at the money call keeps time value, so its curve sits above the expiry payoff

An at the money call keeps time value, so its curve sits above the expiry payoffPayoff of the position at expiry and before expiry. Breakeven at 23,572. Maximum profit in the range ₹69,086, maximum loss ₹20,907; at least one end of the range is still sloping, so the true extreme lies outside it. Spot 23,215.Profit or loss, ₹ for the whole positionAt expiry10 days to expiry−₹25,000₹0₹25,000₹50,000₹75,00022,00023,00024,000Nifty at expirySpot 23,215BE 23,572Max loss ₹20,907No cap
Profit and loss for one lot of the at the money call bought at its 10 Jun 2026 settle price, for the 30 Jun 2026 chain. The curve with 10 days left uses the call's own implied volatility that day. Source: NSE end of day data, computed by RupeeCase. As of 10 Jun 2026.

Look at the at the money call on the 30 Jun 2026 Nifty chain, taken at the close on 10 Jun 2026. Its premium is that day's exchange settle price, and the chart shows what it is made of.

An option price is an expected payoff, worked out on the futures price and then discounted back to the date of the trade. The school prices index options with Black 76, which takes the futures level, the strike, the time left, the implied volatility and the interest rate as inputs. For a call the formula is:

C = e-rT ×
[F N(d1) - K N(d2)]

N is the normal distribution. d1 and d2 measure how far the futures sit from the strike, in units of volatility over the time left. The first four inputs can be read off the market. Implied volatility cannot, so it is backed out from the settle price.

The premium has two parts. Intrinsic value is what the option would pay if it expired at that close. Time value is the rest, the price of the chance that the index moves further before expiry. This strike sits above the index, so the call has no intrinsic value and all of its premium is time value. That is the gap above the expiry line on the chart.

Time value shrinks as expiry comes near, and it shrinks fastest in the last days. Change the volatility input and the price changes with it, even if the index does not move. The chart is for learning the shape of the price, not a forecast of where the premium goes.

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