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ArthVed 9X Academy • Level 7 (Options Trading) • Module 21 (Advanced Pro)

Options Trading Basics
Call / Put • Premium • Option Chain

Options are powerful but extremely risky instruments. This module teaches the complete foundation of options: call vs put, strike selection, premium behavior, ITM/ATM/OTM logic, expiry types, intrinsic vs time value, and how to read an option chain like a professional.

8
Lessons
Advanced Pro
Level
Free
Access
⚠ ArthVed 9X Warning: Options are leveraged. Most traders lose due to poor risk management and time decay. Learn foundation first, trade later.

Module Outcomes

📌 Understand Call / Put logic clearly
📌 Learn strike price & premium behavior
📌 Understand ITM / ATM / OTM practically
📌 Learn intrinsic vs time value
📌 Read Option Chain like a trader
📌 Learn why options are highly risky
Progress: 0% (Start Module)

Module 21 Lesson Map

Options are derivatives. Their price changes faster than stocks, and risk increases exponentially if you ignore time decay.

1. What are Options?
2. Call vs Put Explained
3. Strike Price + Premium Logic
4. ITM / ATM / OTM Meaning
5. Expiry Types (Weekly/Monthly)
6. Intrinsic vs Time Value
7. Option Chain Introduction
8. Why Options are Highly Risky
🎯 Goal of Module 21: Learn options foundation like a professional before trading real money.

Options Payoff Simulator (Call vs Put)

Select Call/Put, strike price, premium, and spot price. Understand profit/loss zones visually.

Select values and click "Calculate Payoff".
Loss Zone Breakeven Profit Zone

Payoff Inputs

📌 CALL profit increases when price goes above strike.
📌 PUT profit increases when price goes below strike.
📌 Premium is maximum loss (if bought option).

ITM / ATM / OTM Simulator (Strike vs Spot)

Move spot price slider and observe how option status changes.

Strike Price
20000
Spot Price
20000
Status
ATM
Spot = Strike → ATM (At The Money)

Premium Breakdown (Intrinsic vs Time Value)

Options premium is a combination of intrinsic value and time value. Time value decays rapidly near expiry.

Total Premium

120

Intrinsic Value

100

Time Value

20

Try Values

Premium = Intrinsic + Time Value

Option Chain Simulator (Basic Reading)

This is a simplified option chain. Learn the key columns used by traders: OI, Change in OI, Volume, IV, Bid/Ask.

Strike
CALL LTP
CALL OI
PUT LTP
PUT OI
19900
210
8.2L
40
2.4L
20000
160
11.5L
80
9.8L
20100
120
7.1L
110
6.5L
20200
80
4.4L
160
12.0L
20300
50
2.1L
220
14.2L

Chain Actions

📌 ATM strike has maximum trading activity.
📌 Higher OI zones often act as support/resistance in options market.

Lesson 1: What are Options?

Options are contracts that give the right (not obligation) to buy or sell an asset at a fixed price.

Options are derivative instruments whose value is derived from the underlying (Nifty, BankNifty, stocks). They allow traders to take leveraged exposure with limited defined risk (premium).

Key Concept

  • Option buyer pays premium
  • Option seller receives premium
  • Buyer has limited loss (premium paid)
  • Seller has potentially unlimited risk
ArthVed 9X Insight: Options are designed for hedging, but traders use them for speculation.

Lesson 2: Call vs Put Explained

Call benefits from price rising. Put benefits from price falling.

Call Option (CE)

  • You buy a call when you expect price to go up
  • Profit increases as price moves above strike

Put Option (PE)

  • You buy a put when you expect price to go down
  • Profit increases as price moves below strike
ArthVed 9X Rule: Never buy options without directional clarity + risk control.

Lesson 3: Strike Price + Premium Logic

Strike is the contract level. Premium is the cost you pay for the right.

Strike Price

  • Fixed contract price decided by exchange
  • Multiple strikes exist around current market price

Premium

  • Option price you pay to buy the contract
  • Premium changes every second
  • Premium increases with volatility and momentum
ArthVed 9X Insight: Premium is not random — it reacts to volatility, time decay, and market expectation.

Lesson 4: ITM / ATM / OTM Meaning

ITM has intrinsic value. ATM is near spot. OTM has only time value.

ITM (In The Money)

  • Call ITM: Spot price above strike
  • Put ITM: Spot price below strike
  • Has intrinsic value

ATM (At The Money)

  • Strike closest to spot price
  • Highest liquidity + fastest premium movement

OTM (Out The Money)

  • No intrinsic value
  • Only time value exists
  • Cheap but risky (can expire worthless)
ArthVed 9X Rule: Beginners should avoid deep OTM buying. Most expire worthless.

Lesson 5: Expiry Types (Weekly / Monthly)

Expiry decides how fast time value decays.

Weekly Expiry

  • Higher theta decay
  • Fast premium movement
  • High risk for buyers

Monthly Expiry

  • Slower decay
  • More stable premium
  • Better for positional hedging
ArthVed 9X Insight: Expiry week is a trap for beginners due to extreme decay + volatility.

Lesson 6: Intrinsic Value vs Time Value

Intrinsic is real value. Time value is expectation + volatility premium.

Intrinsic Value

  • Call: Spot - Strike (if positive)
  • Put: Strike - Spot (if positive)
  • Intrinsic cannot be negative

Time Value

  • Premium paid beyond intrinsic
  • Decays with time (theta decay)
  • Higher IV = higher time value
ArthVed 9X Rule: If market stays sideways, option buyer loses due to time decay.

Lesson 7: Option Chain Introduction

Option chain shows strike-wise market positioning, liquidity, and open interest.

Important Columns

  • OI: Open Interest (contracts open)
  • Volume: traded contracts today
  • LTP: last traded premium
  • IV: implied volatility expectation
  • Bid/Ask: liquidity spread
ArthVed 9X Insight: High OI zones often become psychological support/resistance levels.

Lesson 8: Why Options are Highly Risky

Options are not for emotional traders. They punish impatience.

Why Most Traders Lose

  • Overtrading due to fast movement
  • Buying deep OTM options without confirmation
  • Ignoring theta decay
  • Taking oversized positions
  • No stoploss discipline

ArthVed 9X Risk Rules

  • Always predefine stoploss
  • Never risk more than you can afford to lose
  • Focus on process, not lottery trading
  • Options require high accuracy + discipline
ArthVed 9X Warning: Options are a weapon. Without discipline, they destroy capital fast.

Module 21 Quiz (Options Foundation)

Test your understanding before moving to Greeks module.

Q1: Options give the buyer:
Q2: A CALL option benefits when:
Q3: ATM strike means:
Q4: OTM options contain:
Q5: Weekly expiry options are risky because:
Q6: Main reason traders lose in options:
Score will appear here.
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