- Date : 24/09/2021
- Read: 5 mins
Understand how to buy and sell options with examples and screenshots in Zerodha, ICICI Direct, Sharekhan, Upstox, and others.
If you wish to trade in derivatives, you have two choices: futures and options. This article will focus on how to trade options in Zerodha, ICICI Direct, Sharekhan, Upstox, and others.
An option gives the buyer the right but not the obligation to buy or sell a specified quantity of an asset at a specified price by a specified date. For example, on 17 September 2021, a trader buys an option that gives him the right to buy 550 shares of HDFC Bank at Rs 1600 per share by 30 September 2021 by paying a premium of Rs 20 per share.
In this case, the trader has to make an upfront payment of the premium amount of Rs 20 per share on 17 September. On 30 September, he may decide whether he wants to buy the 550 shares at Rs 1600 per share or let the option lapse. That is why it is said; the option gives the buyer the right but not the obligation to buy.
Types of options
Options are of two types: Call and Put.
Call option: If a trader feels that the price of a particular stock will go up in the near future, he will buy a call option. A call option gives the buyer a right but not the obligation to buy a specified number of shares of a specified company by a specified date by paying a specified premium.
Put option: If a trader feels that the price of a particular stock will go down in the near future, he will buy a put option. A put option gives the buyer a right but not the obligation to sell a specified number of shares of a specified company by a specified date by paying a specified premium.
How to do options trading in Zerodha
Now that we understand the concept of options, let us see how to do an options trade in Zerodha. Select the month and the option strike that you want to purchase.
Buying a put option in Zerodha
The above image shows how to buy a Nifty put option. Fill in the required details like the quantity you want to purchase, the price at which you want to purchase, and swipe the ‘Buy’ button.
Selling a put option in Zerodha
In the earlier section, we saw how to buy a Nifty put option. Assuming the Nifty has fallen after you bought the put option, you can square off (sell) the put option and book a profit.
Select the put option that you have already bought, and go to the sell screen. Enter the quantity you want to sell, the price at which you want to sell, and swipe the ‘Sell’ button.
How to do options trading in ICICI Direct
Next let us see how to do options trading in ICICI Direct with the example of a call option.
Buying a call option in ICICI Direct
The above image shows how to buy a Nifty call option. Select the strike, enter the quantity and price, choose the ‘buy’ option, and click Submit.
Selling a call option in ICICI Direct
Assuming that the Nifty has moved up after you bought the call option, let us see how you can square off (sell) the call option and book a profit.
The above image shows how to place a sell order for a call option. Select the call option you have already bought, enter the sell quantity, the price at which you want to sell, and hit the ‘Submit’ button.
How to do options trading in Sharekhan
Now let us see how to do options trading in Sharekhan with the example of a put option.
Buying a put option in Sharekhan
The above image shows how to buy a Nifty put option. Select the strike, quantity, price, and click on ‘Place Order’.
Selling a put option in Sharekhan
Assuming the Nifty has moved down after you bought the put option, let us see how we can close the trade and book a profit.
As shown in the above image, select the put option you have already bought, enter the sell quantity, the price at which you want to sell, and click the ‘Place Order’ button.
How to do options trading in Upstox
Now let us understand how to do options trading in Upstox with the example of a put option.
Buying a put option in Upstox
The above image shows how to buy a BankNifty put option. Select the strike, enter the quantity, and press the ‘Review’ button.
Selling a put option in Upstox
Assuming the BankNifty has moved down after you bought the put option, let us see how to sell the put option and book a profit.
The above image shows how to sell a BankNifty put option. Select the put option you have already bought, enter the sell quantity, and select the ‘Review’ button.
Last words
In this article, we saw how to buy call and put options with Zerodha, ICICIDirect, Sharekhan, and Upstox. If you are a trader, buying options is better than buying futures from a risk management point of view.
In futures, the profits, as well as losses, can be unlimited. However, the profits can be unlimited when you buy options, but the losses are limited to the premium paid. Hence, you may give preference to buying options over buying futures.
If you wish to trade in derivatives, you have two choices: futures and options. This article will focus on how to trade options in Zerodha, ICICI Direct, Sharekhan, Upstox, and others.
An option gives the buyer the right but not the obligation to buy or sell a specified quantity of an asset at a specified price by a specified date. For example, on 17 September 2021, a trader buys an option that gives him the right to buy 550 shares of HDFC Bank at Rs 1600 per share by 30 September 2021 by paying a premium of Rs 20 per share.
In this case, the trader has to make an upfront payment of the premium amount of Rs 20 per share on 17 September. On 30 September, he may decide whether he wants to buy the 550 shares at Rs 1600 per share or let the option lapse. That is why it is said; the option gives the buyer the right but not the obligation to buy.
Types of options
Options are of two types: Call and Put.
Call option: If a trader feels that the price of a particular stock will go up in the near future, he will buy a call option. A call option gives the buyer a right but not the obligation to buy a specified number of shares of a specified company by a specified date by paying a specified premium.
Put option: If a trader feels that the price of a particular stock will go down in the near future, he will buy a put option. A put option gives the buyer a right but not the obligation to sell a specified number of shares of a specified company by a specified date by paying a specified premium.
How to do options trading in Zerodha
Now that we understand the concept of options, let us see how to do an options trade in Zerodha. Select the month and the option strike that you want to purchase.
Buying a put option in Zerodha
The above image shows how to buy a Nifty put option. Fill in the required details like the quantity you want to purchase, the price at which you want to purchase, and swipe the ‘Buy’ button.
Selling a put option in Zerodha
In the earlier section, we saw how to buy a Nifty put option. Assuming the Nifty has fallen after you bought the put option, you can square off (sell) the put option and book a profit.
Select the put option that you have already bought, and go to the sell screen. Enter the quantity you want to sell, the price at which you want to sell, and swipe the ‘Sell’ button.
How to do options trading in ICICI Direct
Next let us see how to do options trading in ICICI Direct with the example of a call option.
Buying a call option in ICICI Direct
The above image shows how to buy a Nifty call option. Select the strike, enter the quantity and price, choose the ‘buy’ option, and click Submit.
Selling a call option in ICICI Direct
Assuming that the Nifty has moved up after you bought the call option, let us see how you can square off (sell) the call option and book a profit.
The above image shows how to place a sell order for a call option. Select the call option you have already bought, enter the sell quantity, the price at which you want to sell, and hit the ‘Submit’ button.
How to do options trading in Sharekhan
Now let us see how to do options trading in Sharekhan with the example of a put option.
Buying a put option in Sharekhan
The above image shows how to buy a Nifty put option. Select the strike, quantity, price, and click on ‘Place Order’.
Selling a put option in Sharekhan
Assuming the Nifty has moved down after you bought the put option, let us see how we can close the trade and book a profit.
As shown in the above image, select the put option you have already bought, enter the sell quantity, the price at which you want to sell, and click the ‘Place Order’ button.
How to do options trading in Upstox
Now let us understand how to do options trading in Upstox with the example of a put option.
Buying a put option in Upstox
The above image shows how to buy a BankNifty put option. Select the strike, enter the quantity, and press the ‘Review’ button.
Selling a put option in Upstox
Assuming the BankNifty has moved down after you bought the put option, let us see how to sell the put option and book a profit.
The above image shows how to sell a BankNifty put option. Select the put option you have already bought, enter the sell quantity, and select the ‘Review’ button.
Last words
In this article, we saw how to buy call and put options with Zerodha, ICICIDirect, Sharekhan, and Upstox. If you are a trader, buying options is better than buying futures from a risk management point of view.
In futures, the profits, as well as losses, can be unlimited. However, the profits can be unlimited when you buy options, but the losses are limited to the premium paid. Hence, you may give preference to buying options over buying futures.
