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Call Option in the Share Market

A call option is a financial contract in the share market that gives the buyer the right, but not the obligation, to purchase a stock at a fixed price (called the strike price) before a specific expiration date. Traders use call options to benefit from rising stock prices without having to buy the shares upfront. The buyer pays a premium for this right, and if the stock price goes above the strike price, they can profit by buying low and selling high. If the price doesn't rise, the buyer's maximum loss is limited to the premium paid.

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Call Option in the Share Market

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  1. What is a Call Option in the Share Market? Read blog - https://navia.co.in/blog/what-is-a-call-option-in-the-share-market/

  2. Introduction to Call Options What is a Call Option? ● A financial contract that gives the right (not obligation) to buy a stock at a set price (strike price) before expiry. ● Used by traders to benefit from rising stock prices without owning the asset. Ideal for: ● Risk management ● Speculation with limited capital ● Enhancing portfolio returns Read blog - https://navia.co.in/blog/what-is-a-call-option-in-the-share-market/

  3. How Call Options Work Two key players: ● Buyer: Pays a premium to gain the right to buy at the strike price. ● Seller (Writer): Collects the premium, agrees to sell the stock if the buyer exercises the option. Important terms: ● Strike Price ● Premium ● Expiry Date Read blog - https://navia.co.in/blog/what-is-a-call-option-in-the-share-market/

  4. Call Option Example – XYZ Stock You buy a call option: ● Strike Price: ₹4,000 ● Premium Paid: ₹200 per share ● Lot Size: 100 shares If stock rises to ₹4,500: ● Buy at ₹4,000, sell at ₹4,500 → Profit = ₹50,000 If stock falls below ₹4,000: ● Loss limited to premium: ₹200 × 100 = ₹20,000 Read blog - https://navia.co.in/blog/what-is-a-call-option-in-the-share-market/

  5. Key Takeaways – Uses & Risks Advantages: ● Leverage with limited capital ● Defined loss (premium only) ● Potential for large upside Risks: ● Option may expire worthless ● Premium is non-refundable Useful for: ● Bullish market views ● Hedging against short positions ● Generating income (for sellers) Read blog - https://navia.co.in/blog/what-is-a-call-option-in-the-share-market/

  6. Disclaimer Investment in securities market are subject to market risks, read all the related documents carefully before investing. The securities quoted are for illustrative purposes and are not intended as recommendations. Brokerage will not exceed the SEBI prescribed limit. Navia Markets Ltd ,SEBI Registration No.INZ000095034-NSE Member code for CM, FAO & CD: 07708 - BSE Clearing No. for CM, FAO & CD: 6341-MCX Member ID: 45345 NSDL DP ID: IN300378-CDSL DP ID: 12086500-SEBI Registration No. for DP: IN-DP-311-2017-GST Registration number :33AAACM4739R2ZZ-Registered office: Ganga Griha, 4th & 5th Floor, No.9, Nungambakkam High Road, Chennai - 600 034 Email ID: ig@navia.co.in - Contact No: +91 70100 75500 https://bit.ly/naviadisclaimer Read blog - https://navia.co.in/blog/what-is-a-call-option-in-the-share-market/

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