1. 2 An option whose underlying security is an index. If exercised, settlement is made by cash payment, since physical delivery is not possible.A financial derivative that gives the holder the right, but not the obligation, to buy orsell a basket of stocks, such as the S&P 500, at an agreed-upon price and before acertain date. An index option is similar to other options contracts, the difference beingthe underlying instruments are indexes. Options contracts, including index options,allow investors to profit from an expected market move or to reduce the risk ofholding the underlying instrument.

2. 3 Exchange Traded Options (Options) are a versatile and flexible tool thatallow you to employ a range of approaches. Options can be used tocomplement or refine your existing share strategies, or take advantage ofopportunities in ways that owning shares cant. Options can be used to limit risk or to take on risk to profit depending onyour approach. Options can be as simple or as complex as you want. 3. 4Options can be used in a variety of ways, depending on the strategy you can: Manage risk in a falling market - lock in your gains or limit losses. Generate additional income without taking on additional risk. Give yourself time to decide - allows you the freedom to decide whether toinvest in specific shares, without being committed to a course of action. Potentially profit from any market direction - rising, falling or going sideways. Provides leverage to potentially increase returns . 4. 5 There are two types of Options - Call Options and Put Options. Thesetwo options can be bought or sold. They can also be used incombinations to create a variety of strategies suited to your risktolerance. With options positions its important to look at the implications ofholding options positions from both the stand point of the BUYER (ortaker) of the option, and the SELLER (or writer) of the option. 5. Options can be either American-Style Options orEuropean-Style Options and the only difference is thatthe holder of an American style option can exercise theiroption any time before and at expiration of the optioncontract whereas a European option holder can onlyexercise their option on the expiry date of the optioncontract.6 6. 7CALL OPTION PUT OPTION 7. CALL OPTION PUT OPTION 8 8. 9Call option A call option gives you the right to buy within a specified time period at a specified price The owner of the option pays a cash premium to the option seller in exchange for the right to buy 9. 10Put option A put option gives you the right to sell within a specified time period at a specified price It is not necessary to own the asset before acquiring the right to sell it 10. 11The Option PremiumThe price of an option has two components:Intrinsic value: For a call option equals the stock price minus the striking price For a put option equals the striking price minus the stock priceTime value equals the option premium minus theintrinsic value 11. 12Cont An option with no intrinsic value is out of themoney An option with intrinsic value is in the money If an options striking price equals the stockprice, the option is at the money 12. 13Nifty Call Option Strike Price 5800 13. 14Nifty Put Option Strike Price 5800 14. 15Reliance Call Option Strike Price 820 15. 16Reliance Put Option For Strike Price 820 16. 17Suzlon Call Option For Strike Price 17.5 17. 18Suzlon Put Option For Strike Price 17.5 18. 19JP Associates Call Option For StrikePrice 80 19. 20JP Associates Put Option For Strike Price 80