Part 2 Understanding the Master Candle Concept

What Are Options?

Options are derivative instruments, meaning their value is derived from an underlying asset. The underlying asset can be a stock, index, commodity, or currency.

There are two types of options:

Call Option:
Gives the buyer the right to buy the underlying asset at a specific price (called the strike price) before the expiry date.

Put Option:
Gives the buyer the right to sell the underlying asset at a specific price before the expiry date.

For example:
If you buy a NIFTY 50 call option at a strike price of 22,000, you are betting that the NIFTY will rise above 22,000 before expiry. If it does, your call option increases in value.
If you buy a NIFTY put option at 22,000, you’re betting the index will fall below 22,000 — and the value of your put option will rise as the index drops.